Duke Energy will be required to pay Progress Energy a breakup fee of $675 million if it backs out of its deal to buy the Raleigh-based utility.
Such fees are common with major corporate mergers, and are designed to include a financial incentive to keep the deal on track. The fees help cover legal costs and other expenses if a proposed union is terminated.
Progress will owe Charlotte-based Duke a $400 million fee if it accepts another offer or backs out of the Duke deal.
The companies disclosed the breakup fees in a filing with the Securities and Exchange Commission.