The companies are key partners in the $5 billion Atlantic Coast Pipeline that will be the first major natural gas pipeline to serve Eastern North Carolina.
Piedmont Natural Gas started its operations in 1951 in Charlotte. Duke Energy was founded in the city in 1904.
Piedmont shareholders will receive $60 in cash for each share of common stock. That's a 42 percent premium to Friday's closing price. Duke Energy Corp. will also assume approximately $1.8 billion in Piedmont debt.
Piedmont Natural Gas Co. will keep its name and maintain its headquarters in Charlotte, North Carolina, and one of its directors will join Duke's board. It will become a unit of Duke Energy.
Both companies unanimously approved the transaction, which is targeted to close by 2016's end. It still needs approval from Piedmont shareholders and the North Carolina Utilities Commission. The companies will also provide information regarding the acquisition to the Public Service Commission of South Carolina and the Tennessee Regulatory Authority.