Equitable Gobbles Up Carnegie Natural Gas
Equitable Resources signed a definitive agreement to buy
Carnegie Natural Gas Co., a gas utility and USX-Marathon Group
subsidiary serving 9,000 residential, commercial and industrial
customers in Pennsylvania and West Virginia, for an undisclosed sum
Tuesday. The purchase increased Equitable's natural gas throughput
27% and increased its production in Appalachia 9%. The companies
hope to close the deal late this year or early next year.
"This is a good fit because we have contiguous markets," said
Equitable spokesman Bob Butter. "We not only bought the
distribution sector of this company, but we also got a hold of the
production, interstate pipeline and marketing divisions as well."
Equitable Resources' subsidiary, Equitable Gas Co., provides
natural gas distribution services to over 260,000 residential,
commercial and industrial customers located mainly in the city of
Pittsburgh and surrounding municipalities in seven counties in
southwestern Pennsylvania, plus a few municipalities in northern
Butter said Equitable has yet to decide what will happen to
Carnegie's personnel. "Our interests are in building as strong a
regional company as possible. There are some obvious synergies that
will work well the way they are, and there is some overlap. As of
right now, however, we're still trying to figure it all out."
For USX-Marathon, the move is another step in the company's plan
to exit the gas utility business. "We've made it pretty evident
that we want out of the gas utility side of things," said Bill
Keslar, a USX-Marathon spokesman. "The Marathon division is still
active in natural gas, but we've been trying to get out of the
utility sector ever since we sold the Delhi Group to Koch in 1997."
Keslar added that the Carnegie sale had been contemplated for quite
some time. The utility was not put up for bid, but was sold in a
negotiated deal with Equitable.
The transaction is subject to due diligence, customary closing
conditions and regulatory approval.
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