Consolidated Edison to acquire Northeast Utilities for 0.79 times revenue

Weekly Corporate Growth Report, Oct 25, 1999

The Deal: Consolidated Edison Inc. has agreed to acquire Northeast Utilities for $3.3 billion and the assumption of $3.9 billion in debt. The acquisition will create the nation's largest electric-distribution utility. Northeast Utilities shareholders will receive cash and stock valued at $25.00 a share. Shareholders can request cash or stock in the proportions desired, subject to proration based on a split of 50.0% stock and 50.0% cash. Shareholders will also receive and additional $1 a share if Northeast Utilities sells its interest in two nuclear plants. On the news, Northeast Utilities rose 43.75 cents, or 2.1%, to $21.6875/share, while Consolidated Edison fell 6.25 cents, or 1.7%, to $36.375/share.

Discussion: Northeast Utilities is New England's largest electric utility system. It serves 1.7 million customers in Connecticut, Massachusets, and New Hampshire. Consolidated Edison is one of the nation's largest investorowned energy companies. The company provides a variety of energy-related products and services through its six subsidiaries: Consolidated Edison Co. of New York, Orange and Rockland Utilities Inc., Con Edison Solutions, Con Edison Energy, Con Edison Development, and Con Edison Communications.

The acquisition will combine two companies dedicated to maintaining the highest environmental standards while providing superior service to its customers. The combined company will serve 5 million electric and 1.4 million gas customers in a diverse mix of communities with a population of 13 million.