July 29 (Reuters) - Duke Energy ( DUK ) said on Tuesday

it would sell its Tennessee natural gas distribution business to

Spire for $2.48 billion in cash, as the utility aims to

streamline operations and unlock capital to invest in electric

grid upgrades.

About $800 million of the proceeds will be used to pay down

debt at Piedmont Natural Gas, while the remaining $1.5 billion

will support Duke's $83 billion five-year capital plan focused

on grid modernization and energy transition, the company said in

a statement.

The sale agreement includes nearly 3,800 miles of

distribution and transmission pipelines and a liquefied natural

gas facility serving about 205,000 customers.

Piedmont's primary operations will remain in the Greater

Nashville area after the transaction closes, expected in the

first quarter of 2026.

The integration of the Tennessee business is expected to

expand Spire's utility footprint. The natural gas company has

operations in Missouri, Alabama and Mississippi.