Brooklyn, NY-based KeySpan Corp. said Thursday that its shareholders at its annual meeting overwhelmingly approved the $11.8 billion merger of the company with United Kingdom’s National Grid.
The proposed buyout, which was announced earlier in the year, still is awaiting the approval of the New York State Public Service Commission (PSC), the New Hampshire Public Utilities Commission and the Federal Energy Regulatory Commission. It received the approval of the Federal Trade Commission last month. National Grid’s shareholders also have given thumbs-up to the merger.
The merger deal could face problems in New York. At least two locals of the International Brotherhood of Electrical Workers have said they will oppose the proposed National Grid-KeySpan merger unless the companies are more up-front about planned job cuts. The union represents 3,000 workers at KeySpan and its affiliates. The locals have already or plan to file for intervenor status in the New York PSC proceeding to block the deal.
National Grid and KeySpan announced the agreement to merge in February (see Daily GPI, Feb. 28). National Grid will pay $42 per share in cash in a transaction valued at approximately $7.3 billion, with an enterprise value of $11.8 billion.
The transaction, National Grid’s fifth U.S. acquisition, would create the third largest energy delivery utility in the United States, with electricity and gas businesses serving nearly eight million customers in the New York state and New England regions.
KeySpan currently is the fifth largest distributor of natural gas in the United States and the largest in the Northeast, operating regulated gas utilities in New York, Massachusetts and New Hampshire that serve 2.6 million customers. The company also is the largest electric generator in New York state, serving the 1.1 million Long Island Power Authority (LIPA) customers and operating LIPA’s transmission and distribution system under contract. KeySpan serves about 25% of the power needs of New York City.
In addition, KeySpan owns 20.4% of Iroquois Gas Transmission, has a 50% interest in the proposed Islander East pipeline and owns a 20% interest in Millennium Pipeline. It has interests in New York area gas storage facilities as well.
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