Investors responded unenthusiastically today to the news that Greensburg electric utility Allegheny Energy is being acquired by Akron, Ohio-based First Energy for $8.5 billion in stock and debt.

FirstEnergy's shares slipped to $39.68 in mid-day trading, from Wednesday's close of $41.46. Meanwhile, Allegheny's shares rose to $23.68, from $21.02. Normally, that rise might indicate surging optimism, but when the company is being sold for the equivalent of $27.65 per share, it suggests uncertainty.

Some of that uncertainty came through in a conference call this morning, when some analysts questioned whether Allegheny had sold itself short by not seeking other bids, and whether this is the time for FirstEnergy to add coal-fired power plants to its portfolio.

The sale, announced before the market opened, would create a single provider offering electric service to more than 6 million customers in Pennsylvania, Ohio, Maryland, New Jersey, New York, Virginia and West Virginia. The new FirstEnergy would have $16 billion in annual revenue.

With several regulatory approvals required, as well as nods from shareholders of both companies, the transaction could take more than a year to complete.

Boards of the two companies approved the agreement Wednesday.

Under the terms of the arrangement, the resulting company will be headquartered in Akron and keep the FirstEnergy name.

Within that framework, consumers will interact with numerous divisions, as the announcement explained.

"Customers will continue to be served by their current electric utility companies including: Pennsylvania Electric Co. (Penelec); Pennsylvania Power Co. (Penn Power); Metropolitan Edison Co. (Met-Ed); Allegheny Power (including West Penn Power Co., Monongahela Power Co., The Potomac Edison Co.); Ohio Edison Co.; The Cleveland Electric Illuminating Co. (CEI); The Toledo Edison Co.; and Jersey Central Power & Light (JCP&L)."

FirstEnergy's president and CEO Anthony J. Alexander will continue in that role while Paul J. Evanson, who is now chairman, president and CEO of Allegheny Energy, will become executive vice chairman of the combined company, reporting to Mr. Alexander.

Under the terms of the deal, Allegheny shareholders would receive 0.667 shares of FirstEnergy common stock for each share of Allegheny Energy. Based on closing stock prices Wednesday, that stock-for-stock transaction is valued at $4.7 billion.

FirstEnergy shareholders would end up with about 73 percent of the new company, while Allegheny Energy investors would hold about 27 percent, according to the announcement.

In addition, FirstEnergy would assume about $3.8 billion in debt owed by the Greensburg company.

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