DTE Energy and MCN Energy Group said yesterday that the FederalTrade Commission will soon clear the way for the two companies toproceed with their merger, which was announced in October 1999 (seeDaily GPI, Oct. 6, 1999). The merger, when finally completed asexpected this summer, would combine DTE’s Detroit Edison,Michigan’s largest electric utility, with MCN’s MichiganConsolidated Gas Co.

Still to come are approvals by the Securities and ExchangeCommission as well as approval by MCN shareholders. MCNshareholders will vote in the second quarter in a special meeting.

“While this transaction has taken longer than originallyanticipated, this FTC action is a major step forward in thisprocess and toward creating one of the region’s premiere energycompanies,” said DTE CEO Anthony F. Earley Jr. “We have spent morethan a year developing and reviewing the synergies and processesthat will establish this new entity as a solid player in theincreasingly competitive energy market.”

FTC had initially been concerned about possible competitionbetween MichCon and Detroit Edison for a narrow class of electricdisplacement applications in their overlapping retail distributionarea. However, they entered into a consent decree with FTC, underwhich MichCon will transfer a property interest in its pipelinecapacity to a unit of Exelon Corp. under a previously announcedcontract. The contract allows Exelon to use natural gastransportation capacity on MichCon’s system within the relevantdistribution area when the merger is completed.

“The FTC’s action comes as welcome recognition of the efforts ofthe team of employees who worked so diligently to craft afirst-of-its-kind solution to the FTC’s concerns,” said MCN CEOAlfred R. Glancy III. “For those who might believe otherwise,however, the FTC clearance was fully expected and did not factorinto our decision to renegotiate the terms of our mergeragreement.” Instead, he said, “uncertainty over the length of theSEC’s review under the Public Utility Holding Company Act was thekey factor in our board’s decision to renegotiate.”

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