NextEra Energy to Acquire Dominion Energy in $67 Billion All-Stock Merger
NextEra Energy and Dominion Energy announced an all-stock merger on May 18, 2026. Image credit: Green Stocks Research.
Key Points
- NextEra Energy (NYSE: NEE) and Dominion Energy (NYSE: D) have agreed to combine in an all-stock merger, with Dominion shareholders receiving 0.8138 NextEra shares per Dominion share. The stock-for-stock transaction is expected to be tax-free, alongside a separate taxable one-time $360 million aggregate cash payment to Dominion shareholders at closing.
- NextEra shareholders will own approximately 74.5% of the combined company and Dominion shareholders approximately 25.5%, with the transaction valued at approximately $67 billion based on the fixed exchange ratio and NextEra’s pre-announcement share price and the combined entity carrying an enterprise value of roughly $420 billion and a market capitalization near $249 billion.
- The combination would form the world’s largest regulated electric utility business by market capitalization, with approximately 10 million utility customer accounts across Florida, Virginia, North Carolina and South Carolina and 110 GW of generation in operation.
- NextEra is proposing $2.25 billion in customer bill credits spread over two years post-close, with approximately 79% allocated to Virginia, 17% to South Carolina and 3% to North Carolina.
- The transaction is expected to be immediately accretive to NextEra’s adjusted earnings per share at closing and to support a 9%+ long-term adjusted EPS growth target through 2032, with closing anticipated within 12 to 18 months subject to regulatory and shareholder approvals.
Deal Overview
NextEra Energy, Inc. and Dominion Energy, Inc. announced on May 18, 2026 that they have entered into a definitive agreement to combine in an all-stock transaction with an implied value of approximately $67 billion based on the fixed exchange ratio and NextEra’s pre-announcement share price. The combined company will retain the NextEra Energy name and trade on the New York Stock Exchange under the ticker symbol NEE.
Under the agreement, Dominion shareholders will receive a fixed exchange ratio of 0.8138 NextEra shares for each Dominion share they own at closing. NextEra shareholders will continue to hold the same number of shares they own immediately before the transaction. NextEra shareholders are expected to own approximately 74.5% of the combined company on a pro forma basis, with Dominion shareholders owning approximately 25.5%.
The combination would create what the two companies describe as the world’s largest regulated electric utility business by market capitalization and one of the largest energy infrastructure platforms globally. The resulting entity would serve approximately 10 million utility customer accounts across Florida, Virginia, North Carolina and South Carolina, and would own 110 GW of generation across a mix of renewables, gas, nuclear and storage. Based on market data as of May 15, 2026, the combined company would have a market capitalization of approximately $249 billion and an enterprise value of approximately $420 billion.
John Ketchum, chairman, president and chief executive officer of NextEra Energy, will serve as chairman and chief executive officer of the combined company. Robert Blue, chair, president and chief executive officer of Dominion Energy, will serve as president and chief executive officer of regulated utilities and as a member of the board of directors. The combined board will have 14 members, with 10 directors from NextEra Energy and four from Dominion Energy.
Transaction Terms
The transaction is structured as a 100% stock-for-stock merger and is expected to be tax-free to shareholders. In addition to the share exchange, Dominion Energy shareholders will receive a one-time cash payment of $360 million at closing, distributed equally across all outstanding Dominion shares, to compensate for the change in dividend policy. The cash payment is taxable to recipients. Dominion will continue to pay its current quarterly dividend through closing, after which the combined company will operate under NextEra’s existing dividend policy.
| Term | Details |
|---|---|
| Transaction structure | 100% stock-for-stock transaction expected to be tax-free |
| Exchange ratio | 0.8138 NEE shares per D share (fixed) |
| Pro forma ownership | NextEra 74.5% / Dominion 25.5% |
| One-time cash payment | $360 million in aggregate to Dominion shareholders at close (taxable) |
| Dividend policy | Dominion maintains current quarterly dividend through close; combined company adopts NextEra dividend policy |
| EPS accretion | Immediately accretive to NextEra adjusted EPS at closing |
| Expected closing | 12 to 18 months from announcement |
| Combined ticker | NEE (NYSE) |
NextEra was advised by Lazard as lead financial advisor, with BofA Securities and Wells Fargo serving as additional financial advisors, and Kirkland & Ellis LLP as legal counsel. Dominion Energy retained Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC as co-financial advisors and McGuireWoods LLP as legal counsel. The transaction has been unanimously approved by the boards of directors of both companies.
Strategic Rationale
The merger is framed by the two companies as a response to a generational increase in US electricity demand. NextEra and Dominion cite forecasts that US power demand will rise approximately 60% between 2025 and 2045, a growth rate roughly six times faster than the prior two decades. Project sizes have grown alongside demand: where a typical generation project might have been 200 MW and roughly $0.5 billion in capital cost over the last decade, today’s data center hubs are sized closer to 5,000 MW and require capital investments approaching $15 billion.
The strategic premise of the combination rests on scale, with management arguing that scale translates into the ability to buy, build, finance and operate more efficiently. The two companies note that since 2021 they have collectively built more new generation than the next 25 largest US utilities combined, totaling 38 GW. Combined purchasing from 2021 to 2025 included roughly 43 million solar panels, 11 million fossil fleet parts, 9 million nuclear fleet parts, 8,000 battery containers and 2,500 main power transformers.
— John Ketchum, Chairman, President and CEO, NextEra Energy“Electricity demand is rising faster than it has in decades. Projects are getting larger and more complex. Customers need affordable and reliable power now, not years from now. We are bringing NextEra Energy and Dominion Energy together because scale matters more than ever, not for the sake of size, but because scale translates into capital and operating efficiencies. It enables us to buy, build, finance and operate more efficiently, which translates into more affordable electricity for our customers in the long run.”
The two companies also point to limited operational overlap between their core service territories, with NextEra’s regulated utility footprint anchored in Florida through Florida Power & Light and Dominion’s anchored in Virginia, North Carolina and South Carolina. The combination brings together four state-regulated platforms in jurisdictions the companies describe as constructive, with a combined regulated rate base of approximately $138 billion as of December 31, 2025.
— Robert Blue, Chair, President and CEO, Dominion Energy“Dominion Energy and NextEra Energy share a deep commitment to delivering reliable and affordable energy and to the customers and communities we are honored to serve. This combination brings together two strong operating platforms and creates an even stronger energy partner for Virginia, North Carolina, South Carolina and Florida, with the scale and balance sheet to deliver the generation, transmission and grid investments our customers and economies need.”
The Combined Platform
The combined company would be the largest electric power producer in the United States, with 110 GW of generation in operation as of December 31, 2025. The pro forma fleet would include the largest renewables fleet in the world, the largest US gas-fired generation fleet, the second-largest US nuclear fleet, and a leading position in battery storage. The investor presentation shows potential generation capacity of 225 GW to 260 GW or more by 2032, which would more than double the current platform.
One of the central commercial drivers of the combination is the scale of large-load customer demand the two companies expect to serve. Pro forma, NextEra and Dominion identify a combined large-load pipeline of more than 130 GW. This breaks down to roughly 60 GW at NextEra Energy Resources, 51 GW at Dominion Energy Virginia, and 21 GW at Florida Power & Light. Dominion’s Virginia number incorporates 10.4 GW under signed Electric Service Agreements, 11.1 GW under Construction Letter of Authorization, and 29.5 GW under Substation Engineering Letter of Authorization.
| Combined company metric | Value |
|---|---|
| Market capitalization (as of May 15, 2026) | ~$249 billion |
| Enterprise value (as of May 15, 2026) | ~$420 billion |
| Utility customer accounts | ~10 million across FL, VA, NC, SC |
| Generation in operation | ~110 GW |
| Regulated rate base (Dec 31, 2025) | ~$138 billion |
| Large-load customer pipeline | 130+ GW |
| Pro forma average annual CapEx (2027E to 2032E) | ~$59 billion |
| Regulatory capital employed growth (2025 to 2032) | ~11% CAGR |
| Pro forma employees | ~32,600 |
Management sees the need and opportunity to develop approximately 115 GW to 150 GW or more of new generation and storage over the next decade. This includes 77 GW to 108 GW at NextEra Energy Resources from 2026 to 2032, 16 GW at Florida Power & Light, 11 GW across the Dominion Energy Virginia, North Carolina and South Carolina integrated resource plans, 4 GW under the Virginia storage mandate by 2030, and at least 10 GW of incremental data center opportunity. Management identifies more than 15 distinct ways the combined company can grow earnings, spanning regulated utility investments, long-term contracted generation and storage, customer supply and AI-related services.
Regulatory Capital Employed
A measure of the capital base on which a regulated utility earns its allowed return, including invested capital across regulated electric and gas businesses such as transmission. NextEra and Dominion expect combined regulatory capital employed to grow from $90 billion to $100 billion at NextEra in 2027 to $270 billion to $295 billion on a combined basis by 2032, an approximately 11% compound annual growth rate.
Customer and Community Commitments
A central feature of the announcement is a proposed package of $2.25 billion in customer bill credits to be distributed to Dominion Energy customers over the two years following closing. The credits are allocated approximately 79% to Virginia customers, 17% to South Carolina customers and 3% to North Carolina customers.
The two companies have framed the combination around continuity of local operations. The combined entity would maintain dual headquarters in Juno Beach, Florida and Richmond, Virginia, with continued operational headquarters in Cayce, South Carolina. The Dominion Energy Virginia, Dominion Energy North Carolina and Dominion Energy South Carolina operating names will be retained. Edward Baine will lead Dominion Energy Virginia and North Carolina, Keller Kissam will lead Dominion Energy South Carolina, and Scott Bores will continue to lead Florida Power & Light.
For Dominion Energy’s approximately 15,000 employees, the companies have committed to 18 months of job protection post-close and 24 months of compensation and benefits protection. The combined company has also committed to increased charitable giving of an additional $10 million per year for five years, shared across Virginia, South Carolina and North Carolina.
The companies note that large-load customers would pay their fair share for generation through large-load tariffs, a structure intended to ensure that the costs of serving hyperscale data center load are not socialized across residential and small commercial customers.
Financial Outlook and Credit Profile
The combined company is targeting a 9%+ adjusted earnings per share compound annual growth rate through 2032 and through 2035, measured from NextEra’s 2025 adjusted EPS of $3.71. Operating cash flow growth is expected to track at or above the adjusted EPS growth rate, off a 2025 pro forma base of $17.9 billion. The transaction is expected to be immediately accretive to NextEra’s adjusted EPS at closing, after excluding the impact of the bill credits.
NextEra has reaffirmed its standalone financial expectations and updated its pro forma expectations to reflect transaction closing within 12 to 18 months. The 2026 adjusted EPS expectation is $3.92 to $4.02. Dividend growth is targeted at 6% per year from year-end 2026 through 2028, with an expected dividend payout ratio below 55% by 2030.
The pro forma business mix is expected to be more than 80% regulated and 90% to 95% regulated and long-term contracted, based on the methodology used by credit rating agencies. This represents an increase from NextEra’s standalone profile of more than 70% regulated. On a 2029E basis, the combined regulated business mix is expected to break down roughly to 50% to 55% Florida Power & Light, 35% to 40% Dominion Energy Virginia/NC, 5% to 8% Dominion Energy South Carolina, and 2% to 5% NextEra Energy Transmission, with the long-term contracted segment representing 10% to 15%.
| Credit metric | Before | After |
|---|---|---|
| Dominion Energy Virginia ratings (S&P/Moody’s/Fitch) | BBB+/A3/A- | A-/A3/A- |
| Dominion Energy HoldCo ratings (S&P/Moody’s/Fitch) | BBB+/Baa2/BBB+ | A-/Baa1/A- |
| NextEra S&P downgrade threshold (FFO/Debt) | 18% | 17% |
| NextEra Moody’s downgrade threshold (CFO pre-WC/Debt) | 17% | 16% |
| NextEra Fitch downgrade threshold (Debt/(FFO + Interest)) | 4.3x | 4.5x |
| Regulated business mix | >70% | >80% |
NextEra Energy expects to maintain its existing A-/Baa1/A- issuer ratings through the transaction, while Dominion Energy Virginia is expected to receive a one-notch S&P upgrade upon closing. Dominion Energy HoldCo would be upgraded to NextEra Energy’s issuer ratings as a beneficiary of a new parent guarantee of its holding company debt, structured similarly to NextEra’s existing 1998 guarantee of NextEra Energy Capital Holdings debt.
Forecasted equity issuance is expected to average approximately $4 billion per year between 2027 and 2032, representing roughly 1.6% of the pro forma market capitalization and approximately 1.2% of average daily trading volume. The company intends to continue using equity units and a combined at-the-market equity program as funding mechanisms.
— John Ketchum, Chairman, President and CEO, NextEra Energy“By uniting two industry leaders with 238 years of collective experience, this combination creates a stronger company for customers and a stronger long-term value proposition for shareholders. Customers will benefit from $2.25 billion in bill credits and over time from the scale, operating and capital efficiencies this combination unlocks.”
Path to Close
The transaction is expected to close 12 to 18 months from announcement, subject to customary closing conditions and approvals. Required approvals include the shareholders of both NextEra Energy and Dominion Energy, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, approval from the Federal Energy Regulatory Commission under Section 203 of the Federal Power Act, and approval from the Nuclear Regulatory Commission.
At the state level, the companies will file for review and approval with the Virginia State Corporation Commission, the North Carolina Utilities Commission, and the Public Service Commission of South Carolina. The companies plan to file the Form S-4 joint proxy statement and prospectus with the Securities and Exchange Commission in the third quarter of 2026, with NextEra and Dominion shareholder meetings expected in early 2027.
Hart-Scott-Rodino Antitrust Improvements Act
A federal statute requiring parties to large mergers and acquisitions to file pre-merger notifications with the US Department of Justice and the Federal Trade Commission and observe a waiting period before closing. The waiting period allows antitrust regulators to review the transaction and request additional information or challenge the deal if competitive concerns arise.
Subject to the regulatory pathway, the targeted closing window runs through the fourth quarter of 2027.
References
- NextEra Energy and Dominion Energy, “NextEra Energy and Dominion Energy to Combine, Creating the World’s Largest Regulated Electric Utility Business and North America’s Premier Energy Infrastructure Platform Benefiting Customers,” joint press release, May 18, 2026.
- NextEra Energy and Dominion Energy, “Forming America’s Leading Utility Business and Energy Infrastructure Company,” joint investor presentation, May 18, 2026.