Piedmont (NYSE: PNY) Stock Price Soars 38% After Duke Energy Merger

The Piedmont Natural Gas Company Inc. (NYSE: PNY) stock price surged 38.7% this morning (Monday) after the company was acquired by Duke Energy Corp. (NYSE: DUK).

Early this morning, Duke Energy announced it had stpny stock priceruck a deal to buy Piedmont for $4.9 billion. Piedmont shareholders will receive $60 a share - a 42% premium from the PNY stock price's $42.22 close on Oct. 23. The two North Carolina firms will create the biggest energy company in the state and add about 1 million more people to Duke's customer base.

Duke and Piedmont are already partners on the construction of the Atlantic Coast Pipeline. The $5 billion pipeline will stretch 550 miles and serve Virginia and North Carolina residents. It's set to be the first major natural gas pipeline to serve eastern North Carolina.

Duke's acquisition represents the company's desperate initiative to shift from coal to natural gas generation. Since President Obama implemented stricter carbon emissions laws, coal usage has dropped steadily. By the end of 2015, coal's share of power production should only be about 36%. That's down from 38.7% in 2014.

According to Morningstar Inc. (Nasdaq: MORN), Duke's buyout offer was double the fair value of PNY stock. That indicates Duke was willing to pay a high price for Piedmont's natural gas resources.

The merger sent the PNY stock price to an all-time high of $58.55 a share. Shares are now up 61.7% in the last three months.

According to Money Morning Global Energy Strategist Dr. Kent Moors, mergers and acquisitions will continue to wash over the energy market.

In fact, the Duke Energy merger is just the latest in a string of huge deals Moors saw coming...

Back in April, Royal Dutch Shell Plc. (NYSE ADR: RDS.A) bought BG Group Plc. (OTCMKTS ADR: BRGYY) in a $70 billion deal. It's the largest energy merger in more than 10 years and will create the world's largest producer of liquefied natural gas.

"The Shell-BG [transaction] is the first clear megamerger option crossing the oil-gas division," Moors said after the deal broke. "We will see more of these as the new energy balance among a widening number of energy sources kicks in."

According to Moors, the M&A wave will ultimately strengthen the sector and push oil and gas stocks higher.

But targeting mergers and acquisitions is just one of three ways to find the best energy stocks to buy.

Here's Moors' three-part strategy for banking energy profits as the sector rebounds into 2016...

Alex McGuire is an associate editor for Money Morning who writes about oil and gas. Follow him on Twitter at @AlexMcGuire92 for the biggest energy updates.

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