FTC Approves Sempra-KNE Merger
The Sempra Energy-KN Energy merger leaped its first hurdle last Monday,
as the Federal Trade Commission (FTC) cleared it under the Hart Scott Rodino
Act. Shareholders from both companies as well as other federal and state
regulatory authorities still need to approve the deal.
When the merger was first announced last February (See
NGI March 1, 1999), Sempra said it expected the regulatory approvals
to take six to eight months. The FTC approval demonstrates that the merger
is on schedule, a Sempra spokesman said. FERC, the Wyoming Public Service
Commission and the Colorado Public Utility Commission have yet to grant
The combined company, which will retain the Sempra Energy name and San
Diego headquarters, will create an energy conglomerate with a combined
$20 billion in assets. Sempra contributes $10 billion in assets and operations,
a strong balance sheet and the largest retail customer base in the industry
(more than 6 million meters serving 21 million customers), while KN Energy
adds the nation's second-largest gas pipeline and storage operator, and
the sixth-largest integrated natural gas company. Capitalization of the
combined company will be $14.3 billion ($7.1 billion in market value of
equity; $7.2 billion in debt). Based on 1998 results, the combined company
would have revenues of $9.9 billion and more than 15,000 employees.
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