American Electric Power Co. Inc. signed a definitive agreement with Progress Energy Inc. to buy its MEMCO Barge Line Inc. for $270 million, in a deal AEP said would immediately add to its earnings. Columbus, Ohio-based AEP said its AEP Resources Inc. wholly-owned subsidiary will buy 1,200
hopper barges and 30
towboats from Electric Fuels Corp., a Progress subsidiary, making AEP one of the leading barge operators.
"The coupling of the MEMCO barge assets with our existing fleet will add earnings and significant information flow in the sometimes-neglected transportation component of our business," said Paul Addis, executive vice president of AEP's Wholesale activities.
The deals includes the early termination of lease financing related to certain assets of MEMCO and is expected to close in 60 days, the company said. AEP said the the combined barge fleets annually will move 50 million tons of dry bulk commodities, including grain and coal.