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Massachusetts Utilities Put Finishing Touches on Merger

Massachusetts Utilities Put Finishing Touches on Merger

Boston-based BEC Energy and Commonwealth Energy System completed their merger into $4.5 billion NSTAR last Wednesday - one day after winning approval for the transaction from the Securities and Exchange Commission.

The merged company, NSTAR, now becomes the largest combined electric-gas utility in Massachusetts. Through its utility subsidiaries - Boston Edison, Cambridge Electric, Commonwealth Electric and Commonwealth Gas - it will serve about 1.3 million customers in the state, including just over one million electric customers in the eastern section and 240,000 gas users in central and southeastern Massachusetts. The company's goal is to serve 2 million utility customers by the end of 2001.

"The new company allows us to broaden our customer base, and to capture the savings opportunities that the combined operations can produce," said Thomas J. May, who has been named chairman and CEO of NSTAR. And like most utilities in the Northeast region, he indicated that NSTAR will continue to evaluate other acquisition/merger opportunities.

The company's goal has been to "become the premier wires and pipes delivery company [and]...to get out of the generation business. That's all happened already," said NSTAR spokesman Michael Monahan. "We're the first utility in the nation to sell off our full portfolio of fossil fuel generating plants. We [also] were the first utility in the nation to sell a nuclear power plant in the auction process."

Under the terms of the merger agreement, BEC Energy shareholders can elect to receive either $44.10 in cash or one NSTAR common share for each BEC Energy share held, and Commonwealth Energy shareholders can elect to receive either $44.10 in cash or 1.05 NSTAR common share for each Commonwealth Energy share held. Election forms were mailed to shareholders of the two companies last week.

The merger of the two utility companies into NSTAR, which is headquartered in Boston, took less than nine months to complete. Russell Wright, who was president and CEO of Commonwealth Energy, will be president and COO of the new company.

Susan Parker

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