Scottish company buys U.S. utility: Deal would create firm with 7 million customers overall

PORTLAND, Ore. - Scotland's largest utility is buying U.S.utilityPacifiCorp for about $7.9 billion in stock.

The deal announced today would create a company with 7 millioncustomers in Britain and the United States.

While other foreign companies have invested in power plants intheUnited States, this deal if approved by regulators would be thefirstpurchase of an entire U.S. electric utility by a foreign company.PacifiCorp, the third-largest utility west of the Mississippi, has1.4 million customers in seven Western states and about 10,000employees. It is the holding company for Pacific Power and UtahPower.ScottishPower, with some 15,000 employees, supplies gas, water,electricity and phone services to 5 million British homes and hasholdings in the telecommunications, electrical and homeentertainmentindustries."PacifiCorp is an ideal partner for ScottishPower," ScottishPowerchief executive officer Ian Robinson said in a statement. "Thecompany combines an attractive asset base and customer profile withacore utility business offering substantial scope for improvedefficiency."ScottishPower shares dropped 48 cents a share, or 4.3 percent, to$1.07 in early trading in London.Under the terms of the deal, ScottishPower will pay stock worth$25.13 per share at Friday's close for each share of PacifiCorp.PacifiCorp stock closed Friday at $20.75, meaning shareholders wouldgain a 21 percent increase.The deal will give ScottishPower shareholders 64 percent ownershipof the combined company and 36 percent to PacifiCorp shareholders.ScottishPower also will assume PacifiCorp's $4.9 billion debt.Either company must pay a $250 million fee if the deal is terminatedunder certain circumstances.The new company will be based in Glasgow, but PacifiCorp would runScottishPower's U.S. operations from Portland.