October 12, 2011 | last updated June 1, 2012 1:34 pm

NU dividend hangs on NStar merger

The shareholders of Hartford-based Northeast Utilities' stock will receive an 18 percent larger dividend if the company's proposed merger with Boston-based NStar goes through by the end of the year.

If the merger closes before Dec. 30, the Northeast Utilities dividend will be 32.5 cents per share payable on Dec. 30 to shareholders of record on Nov. 10. If the merger closes after that date, the dividend will be 27.5 cents per share.

Under the terms of the merger agreement, NU's first dividend after the merger closes must be equal to the most recent NStar dividend, adjusted for the exchange ratio of 1.312 NU shares for one NStar share. NStar's current dividend is 42.5 cents per share.

The proposed $4.6 billion merger would create the largest utility company in New England with 3.5 million customers spread over six subsidiaries, including Berlin-based Connecticut Light & Power and Yankee Gas. The merger still needs the approval of the Massachusetts Department of Public Utilities.

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