What: Shares of AGL Resources (NYSE: GAS) are up more than 29% at the time of this writing on news that Southern Company (NYSE:SO) will purchase AGL. 

So what: Before the market lost its mind over fears of China's market crashing, Southern announced that it would be purchasing AGL Resources in a $66-per-share cash deal. Southern will also assume all of AGL's debt, so the total enterprise value for this deal comes in at around $12 billion. 

With AGL as part of the Southern Company mix, it will make it the nation's second-largest utility provider in terms of customers served. What is probably more important to the company's long-term vision, though, is that the deal further increases the combined company's regulated utility business as well as makes it more tied to natural gas use. Adding AGL to Southern's portfolio gives it almost $50 billion in regulated base rate revenue, and its consumption and throughput volume of natural gas will climb to 1.5 trillion cubic feet per year, which should give the company some pretty strong purchasing power if it wanted to sign some longer-term supply contracts. 

Now what: For shareholders of AGL Resources, there isn't much more this stock can do. Since it's an all-cash deal, investors won't be getting shares of Southern, and the deal itself isn't expected to close until the second half of 2016. So there is no real reason to buy shares on this news. Investors may wish to hold on a while longer to get a couple more dividend checks, but with shares trading very close to the intended purchase price, there isn't much upside in this stock for the next year or so.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.