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Look's like this is close to a done deal with Duke taking over Progress Energy in a $13Bn deal. The Progress stock price increased 82 cents on Friday after going Ex Dividend the previous day. The good news will be the cheaper energy rates that the companies will have to offer to get the deal past the regulators. Let's hope the HQ of the merged company remains in Raleigh as many high paying jobs will be at risk if the HQ is in Charlotte. Also the potential impact on restaurants, coffee shops and bars in Downtown Raleigh with the loss of customers from layoffs, or closure of the Progress headquarters in Fayettville Street.
I am sure the HQ will go to Charlotte and it will be a devastating blow to momentum in downtown Raleigh. Also, Progress does lots if philanthropic work here and while I'm sure Duke does too, if the HQ is not here I would imagine less money will flow here as well. It will be interesting to see if Souther Company tries to make a last minute bid for Progress but that would mean the HQ might go to Atlanta either way thus could stack up to be quite bad for this area.
Given the problems that Charlotte faces in the banking industry, I doubt there will be any pressure on Duke to move their HQ here. It's bad for Raleigh -- and not just in downtown. Progress employees live all over the city, and some of them will inevitably lose their jobs or be forced into premature retirement.
I'm also concerned that Progress has been planning to reduce coal but Duke has not.
I have some experience with mergers in the energy industry (consulted on two major deals post-merger) and if there's one thing I can state with great certainty is that no logical assumptions should be applied. The likelihood is that senior management will either go away or find new positions in the post-merger company and everyone else will remain largely in place for years, if not forever. The physical infrastructure won't change much because it really can't and the staff needed to support that infrastructure will still be needed.
Merger and acquisition activity is so common in the industry that it's often said that you're either about to buy or about to be bought. This is no different and not like most large mergers you might know from other industries.
I don't know, these sorts of private mergers tend to make me nervous. Theoretically, yes, this should allow lower rates, more efficient processes, etc..., but it does not always work out like that. I will wait and see what happens to overall customer service and electric bill costs (being a Progress customer), before seeing if I need to look at alternatives.
And while I haven't heard any specifics, I will be pleasantly surprised if the amount of jobs in Raleigh stays roughly the same.
Curious why you think rates will go down. Duke will have monopoly thus no resin for lower rates.
Really? How many electricity companies can you choose among today for service to your home?
They're both regulated monopolies within their service areas.
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