Black Hills Energy Corp. announced it will merge with NorthWestern Energy Group, pending regulatory approval. Black Hills offers natural gas services in Kansas, primarily in the southwest and south-central part of the state.

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.