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FTC Approves Sempra-KNE Merger

FTC Approves Sempra-KNE Merger

The Sempra Energy-KN Energy merger leaped its first hurdle 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 Daily GPI, Feb 23), 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 approval.

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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