Major energy distribution firms plan mergers.

Two major planned mergers have been announced that point to accelerating competition and consolidation in the natural gas, power, and energy services sectors.

Sempra Energy and KN Energy Inc. have signed a definitive merger agreement that would form a major, integrated energy company with combined assets of $20 billion. Under terms of the deal, valued at $6 billion, KN will be merged into Sempra.

Southern Union Co. (SU) has confirmed it submitted a merger proposal to Southwest Gas Corp.'s (SGC) board. SU said last week it was performing due diligence regarding its plans to acquire the outstanding stock of SGC for $32/ share.

This merger would create the U.S.'s largest gas-only distribution company, says SU. SGC is already targeted for acquisition by Oklahoma-based integrated energy firm Oneok Inc. In December, Oneok offered $28.50/share for SGC in a merger deal since approved by both firms' boards.

Sempra-KN deal

San Diego-based Sempra is an energy services holding company. Its subsidiaries include Southern California Gas Co. and San Diego Gas & Electric.

Sempra, formed in June 1998 by the merger of Enova Corp. and Pacific Enterprises, says it has the largest customer base in its industry, at 21 …