(CHARLOTTE) -- Duke Energy has a deal to purchase Progress Energy.  The two North Carolina based utilities will merge in a deal valued at about $26 billion.  This includes $13.7 billion in stock and another $12.2 billion in Progress Energy net debt.

Under the merger agreement, Progress Energy’s shareholders will receive 2.6125 shares of common stock of Duke Energy in exchange for each share of Progress Energy common stock. Based on Duke Energy’s closing share price on Jan. 7, 2011, Progress Energy shareholders would receive a value of $46.48 per share, or $13.7 billion in total equity value.

“Our industry is entering a building phase where we must invest in an array of new technologies to reduce our environmental footprints and become more efficient,” said Jim Rogers, chairman, president and chief executive officer of Duke Energy. “By merging our companies, we can do that more economically for our customers, improve shareholder value and continue to grow.

The combined companies will be called Duke Energy and will serve approximately 7.1 million electric customers six states, including North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio.  The headquarters of the new company will be in Charlotte, where Duke Energy is already headquartered.

The merger is subject to regulatory approval.  A Progress Energy spokesman said they expect the transaction to close in about a year.