Black Hills Corp. and NorthWestern Energy announced Tuesday an agreement to merge in an all-stock, tax-free transaction

NorthWestern Energy Group and Black Hills have agreed to combine to form a large $7.8 billion regulated electric and natural gas utility company at a time of climbing energy demand across the U.S.

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