Southern Co. is buying AGL Resources Inc. for approximately $7.93 billion, which will create the second-biggest utility company in the U.S. by customer base.

The combined business will include 11 regulated electric and natural gas distribution companies, serving approximately 9 million customers.

In a statement, Southern CEO Tom Fanning says his company has been looking for opportunities in the natural gas industry for some time.

Electric utilities around the U.S. are using more gas, as they shut down coal-fired power plants.

Southern will pay $66 in cash for each AGL share, a 38 percent premium to the company's Friday closing price of $47.86.

Southern and AGL put the deal's enterprise value at about $12 billion.

AGL, which will maintain its headquarters in Atlanta, will become a subsidiary of Southern.

Both companies' boards have approved the transaction, which is targeted to close in the second half of 2016. It still needs approval from AGL shareholders and certain state utility and other regulatory commissions.

Tags: Southern Company, AGL Resources