FPL Group Agrees to Merge with Entergy

N E W  Y O R K, July 31 -- FPL Group Inc., the parent ofFlorida Power & Light Co., said today it would merge withEntergy Corp. in a stock deal worth $7 billion to create thelargest U.S. power generating company.

The combined company would have a total enterprise value ofmore than $27 billion, consisting of $16.4 billion in equitymarket capitalization and $10.7 billion in debt and preferredstock, the companies said.

The merger is expected to immediately boost earnings forboth companies.

Under the terms of the agreement, FPL shareholders wouldreceive one share of a new holding company for each FPL shareheld. Entergy shareholders would get 0.585 of a share of the newholding company for each Entergy share.

Based on the companies’ closing stock prices, the deal wouldvalue Entergy at its market value of $7 billion, or about $30.89per share. FPL shares closed Friday at 52-13/16, off a year highof 56-5/8 but up from a low of 36-3/8.

Entergy stock ended at 30-5/16, off a high of 31-3/16 but upfrom a low of 15-15/16.

Shareholders’ Approval Required

The combination must be cleared by shareholders as well asfederal regulators. FPL and Entergy said they hope to completethe transaction within 15 months.

“The merger combines two strategically aligned, financiallyhealthy companies into an organization that has no equal in theindustry,” said J. Wayne Leonard, Entergy chief executive.

Leonard will serve as president and chief executive of thecombined company while FPL’s chief executive, James Broadhead,will serve as chairman.

The deal was billed as a merger of equals but gives FPLshareholders 57 percent of the combined company and eight of 15seats on the board of directors, the companies said.

Once combined, the new company is expected to see annualcost savings of $110 million to $150 million in its regulatedbusinesses derived from eliminating duplicate corporate andadministrative positions and programs.