FirstEnergy Corp. recently disclosed its deal with Allegheny Energy Inc. FirstEnergy has agreed to buy Allegheny Energy Inc. of Greensburg, Pa., in a stock-for-stock transaction valued at about $8.5 billion that would create one of the largest electric companies in the country.

According to the deal FirstEnergy agrees for an all stock transaction worth $4.7 billion and also it will pay Allegheny's $3.8 billion of net debt. After completing the deal FirstEnergy would become one of the five largest publicly traded utilities in the United States.

The deal is expected to close in 12 to 14 months. FirstEnergy is expecting that the deal will start adding earnings in the first year after closing.

"This transaction will provide outstanding value to both companies' shareholders offering enhanced earnings growth potential and a more competitive cost structure," said Anthony J. Alexander, president and chief executive officer of FirstEnergy.

The combined company is supposed to retain the FirstEnergy name. The new company would reportedly have 10 operating utilities in seven states serving more than 6 million customers. FirstEnergy expects that recent deal will accelerate its efforts to strengthen the operating performance of its generating fleet. On the basis of the figures from FirstEnergy and Allegheny as of Dec. 31, 2009, the combined company is supposed to have annual revenue of about $16 billion and annual net income of $1.4 billion.