National Fuel Gas Company ( NFG ) shares are trading lower on Tuesday, following the company’s disclosure of the acquisition of CenterPoint Energy, Inc ( CNP ).’s Ohio natural gas local distribution company (LDC), for $2.62 billion.

Details

The sale price represents a 1.9x multiple of the 2024 Ohio LDC rate base.

Additionally, it values the deal at approximately 1.6 times the estimated 2026 rate base of $1.6 billion.

The transaction encompasses approximately 5,900 miles of transmission and distribution pipelines across Ohio, serving approximately 335,000 metered customers.

Also Read: CenterPoint Energy Investing Billions, Adding 800 New Jobs By 2030

The company anticipates that the transaction will be completed in the fourth quarter of 2026, subject to customary closing conditions.

National Fuel Synergies

Following the addition of business, National Fuel's gas utility operations will serve about 1.1 million customers across New York, Pennsylvania, and Ohio.

The acquisition is expected to double the utility rate base to roughly $3.2 billion, shifting the company's business mix toward a greater share of steady, regulated earnings and growth.

Also, National Fuel expects the acquisition to be immediately accretive to regulated EPS, excluding one-time costs, and neutral to adjusted results in fiscal 2028, turning accretive thereafter.

Synergies & Outlook For CenterPoint

The divestiture underscores CenterPoint's strategy of efficiently recycling capital, with the proceeds set to help fund its $65 billion capital investment plan, one of the largest in the industry.

The move will also allow the company to refocus future investments on its core regulated electric and natural gas operations across its multi-state utility network.

CenterPoint reaffirmed its recently raised adjusted EPS growth outlook of 9% for 2025, along with its long-term earnings targets through 2035.

Management Commentary

Jason Wells, chair and chief executive officer of CenterPoint Energy ( CNP ), said, “As we shared recently, as part of our refreshed 10-year capital plan, this transaction will allow us to continue to optimize our portfolio of utility operations and efficiently recycle more than $2 billion back into our other electric and natural gas businesses which will help fuel our industry leading earnings growth over the next 10 years.”

David P. Bauer, president and chief executive officer of National Fuel, added, “Acquiring a natural gas utility of this quality, with a long runway of capital investment pathways, is a great opportunity to reinvest free cash flow from our integrated upstream and gathering operations, further enhancing the long-term outlook for regulated growth.”

As of June 30, National Fuel’s Cash and Cash Equivalents stood at $39.3 million.  

Investors can gain exposure to the stock through the Virtus Reaves Utilities ETF and Series Portfolios Trust Adaptiv Select ETF (ADPV).

Price Action: NFG shares are down 3.11% at $83.80 at the last check on Tuesday.

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