AltaGas Ltd. may more than double in size if it completes a possible deal to acquire the parent company of Washington's natural gas utility.
Calgary-based AltaGas, which has gas- and power-distribution operations in Canada and the United States, acknowledged on Thursday that it was in talks with a third-party regarding a potential transaction, but gave no assurances that it would close a deal and offered no details.
It made the statement after The Wall Street Journal reported AltaGas was discussing a merger with WGL Holdings Inc. that could be worth $5-billion (U.S.) to $6-billion.
The companies operate similar businesses in gas and power distribution, natural gas pipe-lining and processing as well as storage – segments of the energy business that have been popular targets in recent merger and acquisition activity.
"Until such time as it is appropriate to make a public announcement on any potential transaction, should one occur, AltaGas will not comment further on this matter," the company said in its statement, issued in response to a request by the Toronto Stock Exchange.
Its stock was halted late in the session, and WGL's New York Stock Exchange-listed shares surged 6 per cent, closing at $80.26, following the report. T
hat gives the company, which serves 1.1 million customers in the metropolitan D.C. area, a market capitalization of $4.1-billion.
In U.S.-dollar terms, AltaGas has a market value of about $4.3-billion, its shares having last traded at $33.65 (Canadian), down 43 cents.
AltaGas is no stranger to U.S. operations, running gas utilities in Michigan and Alaska.
It also has franchises in Alberta, British Columbia, Nova Scotia and the Northwest Territories.