The utility will have a market capitalization of approximately $7.8 billion, based on each company’s closing stock price as of Monday.

Black Hills and the NorthWestern Energy Group have entered a definitive agreement for an all-stock, tax-free merger that will establish a regional electric and natural gas utility company with a pro forma market capitalisation of $7.8bn. The combined company will serve more than two million customers across eight US states.

Under the all-stock deal, NorthWestern shareholders will receive 0.98 Black Hills share for each held. This per-share value of $59.14 gives NorthWestern an equity value of $3.6 billion, according to Reuters' calculation.