Duke Energy said Monday it agreed to buy Progress Energy Inc for $13.7 billion in stock, creating the largest U.S. power company.

The transaction would create an industry giant with approximately 7.1 million electricity customers in North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio, and 57,000 megawatts of generating capacity.

Duke’s offer was a 6.4 percent premium over the last 20 trading days, the company said, and the deal would be accretive to Duke’s earnings in the first year.

Duke is currently the third-largest U.S. utility and would become both the largest in market value and generating capacity if the purchase is completed.

That could create a hurdle for regulators, who have blocked or created roadblocks in other deals in recent years.

Duke said Progress Energy shareholders would receive 2.6125 shares of common stock of Duke Energy for each share held, or $46.48 per share, representing a 4 percent premium to the stock’s Friday close on the New York Stock Exchange.

Duke Energy said it also will assume about $12.2 billion in Progress Energy’s debt. The company also expects to effect a reverse stock split immediately prior to closing.

Jim Rogers, chairman and chief executive of Duke, was expected to become chairman of the new company, while Bill Johnson, the chairman and CEO of Progress, would become CEO of the merged companies.

Duke Energy shares closed at $17.79 on the New York Stock Exchange on Friday.

Progress shares rose 1 percent in premarket trading to $45.20, while Duke shares slid less than 1 percent to $17.70.