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National Fuel Gas Company ("National Fuel" or the "Company") (NYSE:NFG) today announced it has entered into a definitive agreement with CenterPoint Energy Resources Corp. ("CERC"), a subsidiary of CenterPoint Energy, Inc. (NYSE:CNP) ("CenterPoint") to acquire CenterPoint's Ohio natural gas utility business ("CNP Ohio").
National Fuel is acquiring the equity interests in CNP Ohio for total consideration of $2.62 billion on a cash-free, debt-free basis, subject to customary closing adjustments, representing an acquisition multiple of approximately 1.6x estimated 2026 rate base of $1.6 billion. Upon closing, National Fuel will also acquire a dedicated team of employees that operate approximately 5,900 miles of distribution and transmission pipeline and serve approximately 335,000 residential, commercial, industrial and transportation customers that consume approximately 60 Bcf of natural gas per year. Closing of the transaction is expected to occur in the fourth quarter of calendar 2026, pending completion of a notice filing and review with the Public Utilities Commission of Ohio, Hart-Scott-Rodino review, and other customary closing conditions.
This acquisition will add significant regulated scale for National Fuel, doubling the size of the Company's gas utility rate base, while expanding its operations into the neighboring state of Ohio, a jurisdiction that is both highly supportive of natural gas and maintains a constructive regulatory framework. This significant increase in regulated cash flows, alongside National Fuel's unique ability to fund future growth capital with free cash flow from its integrated upstream and gathering operations, will further support the Company's investment grade balance sheet.
Financing
In connection with the acquisition, National Fuel has obtained a fully committed bridge facility for the entire purchase price supported by The Toronto-Dominion Bank, New York Branch and Wells Fargo Bank, National Association.
At closing, National Fuel will issue a promissory note in the amount of $1.2 billion to CERC. The remainder of the purchase price will be paid in cash. The promissory note, which was part of CenterPoint's transaction structure and was incorporated into National Fuel's business valuation, will have a maturity date of 364 days post-closing and will carry an interest rate of 6.5%.
National Fuel intends to execute permanent financing, inclusive of the amount to repay the $1.2 billion promissory note, using approximately $300 to $400 million of common equity, along with the issuance of long-term debt and expected future free cash flow from the Company's integrated upstream and gathering businesses to fund the transaction. The Company expects that its ultimate financing mix will maintain a strong credit profile that supports its investment grade credit rating.
