Nipsco Industries reached the brink of gaining a valuable eastcoast influence Thursday as the SEC approved a merger betweenNipsco and Massachusetts-based Bay State Gas Co. The $780 millionmerger was originally announced in December of 1997. Both sides arereviewing final documentation and no other regulatory matters arepending. Nipsco expects the deal to close today.

“I think lots of people are wondering why it took so long,” saidNipsco spokesperson Kris Falzone. “There were no snags, andactually state approvals have been in since last fall. It was justa matter of getting through the SEC. Dotting the “i”s and crossingthe “t”s. Now we can focus helping the customers. Bay States is thecornerstone of our east coast strategy.”

Falzone said the big winner of this deal will be the Bay Statecustomers, who will receive a five year rate freeze of their basicgas rate. The customers will also benefit from receiving their gasfrom a larger company that can offer a variety of services alongwith reliable gas.

“Our merger with Nipsco Industries will provide Bay State thesize and scope we need to succeed in the changing energy markets ofthe future,” said Roger Young, chairman of Bay State Gas, whichserves 305,000 natural gas customers in Massachusetts, NewHampshire, and Maine.

Under the terms of the agreement, Bay State and its subsidiary,Northern Utilities Inc., will become wholly owned subsidiaries ofNI. They will still operate with local management, employees, anddirectors. No layoffs are expected to result from the merger.

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