Utility company FirstEnergy said Thursday that it is buying rival Allegheny Energy for about $4.7 billion in stock in a deal that will create one of the nation’s largest power companies with customers from Ohio to New York.

The acquisition will create a company with 10 utilities serving 6 million customers in seven states, with $16 billion in annual revenue and $1.4 billion in profit.

FirstEnergy is touting the opportunities that come with its bid for Allegheny — a 70 percent increase in power generation, a more diversified portfolio of power plants and adjacent geographic footprints that could bolster growth opportunities while saving money.

“It’s a natural fit that has the potential to produce lower risk, higher growth, a cleaner generation fleet, a stronger balance sheet, and increased earnings,” Anthony Alexander, FirstEnergy’s president and CEO, told analysts on a conference call.

The deal is expected to close within 14 months.

Shareholders of Allegheny, based in Greensburg, Pa., will receive 0.667 shares of FirstEnergy common stock in exchange for each share they own. Based on Tuesday’s closing price, those shares will be valued at $27.65 and represent a 32 percent premium over Allegheny’s closing price of $21.02 on Wednesday.

FirstEnergy also will assume $3.8 billion in debt.

Allegheny shares jumped $2.21, or 10.5 percent, to $23.23 in Thursday morning trading. FirstEnergy shares fell $2.41, or 5.8 percent, to $39.03.

There haven’t been many big deals in the power sector recently. The recession has made financing difficult to get and has crippled demand for power generation, especially among industrial customers. That has forced utilities to slash costs and cut projects. At the same time, trying to complete mergers that must be approved by utility regulators in several states can slow the process.

Exelon, based in Chicago, backed off its bid to buy NRG Energy, based in Princeton, N.J., after NRG said the offer was too low. French power company EdF recently bought half of the nuclear power business of Constellation Energy for about $4.5 billion.

FirstEnergy also said Thursday that its fourth-quarter profit fell by 40 percent, in part because of continued weak demand for power generation, especially among steel and automotive customers.

The companies said the deal makes sense in several respects. FirstEnergy serves 4.5 million customers in Ohio, Pennsylvania, New Jersey and New York whose family of utilities includes Ohio Edison, Cleveland Electric Illuminating, Toledo Edison and Jersey Central Power and Light.

Allegheny has 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia with utilities that include Allegheny Power and Potomac Edison. The deal will make FirstEnergy the largest utility in Pennsylvania with 2 million customers.

The companies say it will improve the mix of power generation at a time when regulations on emissions, including carbon dioxide, are expected to get tougher.

Allegheny depends on coal for much of its generation. FirstEnergy relies on nuclear power along with coal, natural gas and renewable sources.

The companies said 80 percent of the generation from the combined company will come from nuclear power and super-efficient coal plants, which will give them an advantage over other power companies.

“Frankly, I don’t think you will find many mergers that have the same business logic as this one does,” said Paul J. Evanson, chairman, president and CEO of Allegheny.

Evanson said coal will continue to be an important part of the country’s energy future. “But with the overhang of climate change, when you have a fleet of just one fuel you also have the potential for downside,” he said.

Alexander will remain the top executive of the combined company, which will be based at FirstEnergy’s headquarters in Akron, Ohio. Evanson will become executive vice chairman and report to Alexander.

FirstEnergy reported profit of $238 million, or 78 cents per share, for the quarter ended Dec. 31 compared with profit of $332 million, or $1.09 per share, in the year-ago quarter.

Revenue fell to $3 billion for the quarter from $3.2 billion a year ago.

For the year, FirstEnergy reported profit of $1 billion, or $3.29 per share, compared with $1.3 billion, or $4.38 per share, in 2008. Revenue fell to $13 billion from $13.6 billion in 2008.