Nicor parent company acquired in $8 billion deal

AGL Resources Inc., the parent company of Naperville-based Nicor Gas, has been acquired by Southern Co., the third-largest U.S. utility owner, for $8 billion in cash in a move to capitalize on growing demand for the heating and power-plant fuel.

AGL Resources' shareholders will receive $66 for each share they own, the Atlanta-based companies said in a joint statement Monday. That represents a 38 percent premium to the Aug. 21 closing price.

The transaction is the largest on record for Southern, which has been increasing gas use over coal to supply its 4.5 million electricity customers in four Southeastern states. Southern joins utilities including NextEra Energy Inc., Eversource Energy and DTE Energy Co. in forming ventures to build pipelines as growth in power slows and a glut of cheap gas boosts volumes for distributors.

"We really consider this to be a growth play," Southern Co. Chief Executive Officer Tom Fanning said Monday in a telephone interview. "Expanding into natural gas infrastructure further is absolutely something we want to do."

In addition to Nicor, AGL owns gas utilities with 4.5 million customers in seven states and is a partner in several pipeline projects.

Nicor Gas serves more than 2.2 million customers in the northern third of Illinois outside the city of Chicago, according to Nicor's website. The company maintains a 33,000-mile distribution system, part of a network of eight interstate pipelines.

The deal is expected to close in the second half of 2016, subject to approval of shareholders of AGL as well as state regulators in Georgia, Illinois, New Jersey, Maryland and Virginia, the companies said.