Following months of negotiations that led to a settlement agreement in August, the New Jersey Board of Public Utilities (BPU) has approved GPU Inc.’s merger with FirstEnergy Corp. Now all that stands in the way is an approval by the U.S. Securities and Exchange Commission, after which the financial closing of the transaction would take place.

The BPU staff had previously urged the board to reject the merger on the grounds that the two companies had failed to back up claims that it would not harm ratepayers in the Garden State. The board’s staff made its recommendation in an initial brief filed in late May. However, staff and the other stakeholders were able to hammer out a deal in August and submit it to the administrative law judge hearing the case. Signatories to the deal included GPU’s Jersey Central Power & Light, FirstEnergy, the BPU staff, the New Jersey Ratepayer Advocate, Co-Steel Sayreville Inc., the Independent Energy Producers of New Jersey, Shell Energy Services Co. LLC and The New Power Co.

The merger was first unveiled in August of last year. Under the terms of the deal, FirstEnergy will acquire all of GPU’s common stock for about $4.5 billion in cash and FirstEnergy common stock. FirstEnergy, a diversified energy services holding company, and GPU, a public utility holding company, will create the sixth largest U.S. investor-owned electric system serving about 4.3 million customers throughout 37,200 square miles of Ohio, Pennsylvania and New Jersey. The combined revenues of the two companies for the 12 months ending June 30, 2000, totaled $12 billion, and the assets equaled $38.6 billion. The combined company would also have the largest customer base in the PJM power pool.

A spokesman for GPU said pending the SEC approval, the company expects the merger to be completed sometime in October.

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