Dominion Energy: Beyond the Scana Merger

When Dominion Energy (NYSE: D) announced its takeover offer for Scana Corp (NYSE: SCG) in early January, investors were immediately skeptical. Over the next five months, the utility’s shares dropped by nearly 25 percent.

Scana at the time was back on its heels after cancelling two new nuclear reactors at the Summer site in South Carolina. Politicians and regulators alike called for the company return to ratepayers the billions of dollars in rates collected during construction, prompting warnings from management of protracted litigation and even bankruptcy.

Dominion had presented its offer as a win-win alternative to Armageddon. But the company and its CEO Tom Farrell soon came under fire themselves. And by the end of the month, the state House of Representatives by a 119 to 1 vote passed a bill that would (had it become law) have forced the company to walk away from its bid, as it would have blocked Scana from recovering any Summer costs.