The acquisition would expand CenterPoint’s reach beyond the states of Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas to Vectren’s core markets of Indiana and Ohio, diversifying its customer base and giving it more scale.
The exact price the companies were negotiating could not be learned, but the deal is expected to be at a premium to Vectren’s market capitalization of $5.4 billion, the sources said.
The deal could be announced as early as Monday, although it is always possible that talks fall apart at the last minute, the sources added.
CenterPoint and Vectren did not immediately respond to requests for comment.
The deal would illustrate how the U.S. power utility sector continues to consolidate, as consumption in many parts of the country flattens. An expanding population and growing economic activity are more than offset by energy efficiency and conservation measures taken by consumers, companies and local governments.
Other U.S. utility deals announced in the last 12 months include San Diego-based Sempra Energy’s (SRE.N) $9.45 billion acquisition of Oncor of Texas, and Canada’s Hydro One Ltd (H.TO) buying Spokane, Washington-based Avista Corp (AVA.N) for C$6.7 billion ($5.3 billion).
Headquartered in Evansville, Indiana, Vectren provides gas and electricity to more than 1 million customers in nearly two-thirds of Indiana and about a fifth of Ohio.
Based in Houston, CenterPoint serves more than 5 million metered customers, primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas. It has a market capitalization of $11.5 billion.
Reporting by David French and Greg Roumeliotis in New York; Editing by Cynthia Osterman