In what, according to Thomas Reuters' statistics, can be termed as the largest power sector deal in the last two and a half years, Pennsylvania utility PPL Corp is acquiring the regulated US business of Germany's E. ON AG - the world's biggest utility by sales -, in a $6.7 billion in cash.

As a result of the acquisition, Allentown, Pa.-based PPL will gain hold over two of Kentucky's largest utilities - Louisville Gas & Electric Co, and Kentucky Utilities Co. Both the utilities together operate nearly 7,600 megawatts of electric generation, and fulfill the power requirements of almost 1.2 million customers.

Noting that the E. ON acquisition will push PPL into new territories in the South, and help it increase its focus on the less risky, utility side of its business, James Miller - Chairman and CEO of PPL - said in an interview: "Creating that balance rather than being highly leveraged to the wholesale power markets is going to create much more value to the shareholders."

Meanwhile, from the E. ON standpoint, the sale of the Kentucky-based unit forms part of the company's plan to restructure operations and reduce debt. However, like all other US utility deals, the divestiture by E. ON mandates a regulatory approval - a process that has earlier foiled similar transactions as state regulators push for consumer benefits.