FPL Group-Entergy Deal Hits Roadblocks

The proposed $9-billion merger of FPL Group Inc. and Entergy Corp. has hit vaguely defined snags, prompting concerns among analysts about the fate of the deal that would create the nation’s largest utility. The companies jointly announced that “certain issues have arisen in connection with their pending merger, including governance structure/value-related issues and integration of the companies going forward.” FPL and Entergy officials plan to meet soon in an attempt to deal with the problems. The companies declined to give further details. Last July, the companies announced an all-stock deal--then worth about $7 billion--to forge a utility powerhouse with 6.3 million customers from Florida to Arkansas. Shareholders approved the deal in December, and it was expected to be finalized in the fourth quarter after regulatory scrutiny of the merger. The broad scope of the new potential merger roadblocks suggests the problems are serious enough to threaten the marriage of the two companies, analysts said. Juno Beach, Fla.-based FPL fell $2.44 to close at $61.81, while New Orleans-based Entergy fell 60 cents to close at $36.90, both on the New York Stock Exchange.