Getting over its last major regulatory hurdle unscathed, Dallas-based Atmos Energy Corp. said it expects to close its $195 million acquisition of privately-held Mississippi Valley Gas Co. by Dec. 1. The company said it received approval Tuesday from the Mississippi Public Service Commission to form the state’s largest natural gas utility.

Atmos Energy said the commission’s decision was based on a stipulated agreement negotiated between it and the Mississippi Public Utilities staff. The transaction has already received federal regulatory approvals as well as approvals from six other state utility commissions.

Under the terms of the acquisition, which was first announced in September 2001 (see Daily GPI, Sept. 25, 2001), Atmos Energy will acquire Mississippi Valley Gas for $75 million cash and $75 million of Atmos Energy common stock. It also will repay approximately $45 million of Mississippi Valley Gas’ long-term debt.

Upon completion of the deal, Atmos Energy said it expects the acquired operations to be slightly accretive to fiscal 2003 earnings, excluding any one-time charges related to the acquisition.

“We are gratified to receive the Mississippi Public Service Commission’s order that allows us to complete our acquisition of Mississippi Valley Gas,” said Robert W. Best, CEO of Atmos Energy. “The Mississippi Public Utilities Staff has been extremely diligent in reviewing all aspects of the transaction and has worked for months with our acquisition team to reach a fair and equitable stipulation and agreement.”

The executive added that Atmos Energy looks forward to entering the Mississippi market, the 12th state in which the company will serve natural gas utility customers. “Mississippi Valley Gas will fit well into Atmos Energy’s system,” Best said. “We are enhancing our position in the Southeastern United States and are gaining the advantages of a strong operating utility with its own gas storage facilities and the goodwill from Mississippi Valley Gas’ excellent customer service.”

Once the transaction is finished, Best said Mississippi Valley Gas will maintain its headquarters in Jackson and will operate as a separate Atmos Energy business unit. He added that the division will benefit from Atmos Energy’s “greater economies of scale and advanced technologies to help keep its operating costs low.”

Mississippi Valley Gas serves approximately 260,000 Mississippi customers in 144 communities throughout 36 counties.

Atmos Energy’s utility operations serve more than 860 small and medium-size communities in 11 states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. After acquiring Mississippi Valley Gas, Atmos Energy will serve approximately 1.7 million gas utility customers.

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