Bloomberg News reported Great Plains Energy agreed to buy Westar Energy – the biggest utility in Kansas for $8.6 billion dollars. Great Plains will pay $51 a share and $9 in stock and assume the debt of $3.6 billion. Last year the price was around $35.00 a share.

Westar has paid a dividend since the 1980’s which meant the dividends plus stock appreciation added to be a good investment. It also means there was a reason why the Board decided to merge. The reason given in the news story was the demand for power is decreasing as we become more energy efficient and operational costs have risen. If it affects billion dollar companies such as Westar Energy then it affects other utilities.

Linking to dividend paying stocks, this is where you can a long term view as long as the company is paying their dividends. There are other Westar Energy’s on the stock exchange and you can build positions in them that can lead to capital gains as the industry consolidates. One of the good things is to collect a dividend while you wait, you can reinvest in more stock or buy alternatives. In this fashion you are taking advantage of industry consolidations which help push up stock prices; be paid a dividend and keep your risk level on the low side.

There are more questions than answers, till the next time – to raising questions.