The proposed acquisition of KeySpan Corp. by National Grid of the United Kingdom took a major step forward Friday as the Federal Trade Commission (FTC) granted early termination of the final period for review under the Hart-Scott-Rodino Antitrust Improvements Act.
Remaining approvals for the $7.3 billion acquisition include clearance under foreign investment laws; and authorizations from the Federal Energy Regulatory Commission, the New York Public Service Commission and New Hampshire Public Utilities Commission. The boards of both companies have unanimously approved the acquisition.
The merger, which was announced in March, 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 (see Daily GPI, Feb. 28).
The KeySpan transaction is National Grid’s fifth U.S. acquisition. Previously, the British energy company had acquired New England Electric System and Eastern Utilities Associates (2000), and Niagara Mohawk (2002). Earlier this year, National Grid announced that it would acquire the Rhode Island gas distribution business of Southern Gas Co.
KeySpan 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 the Iroquois Pipeline, has a 50% interest in the proposed Islander East pipeline and owns a 20% interest in Millennium Pipeline, as well as has interests in New York area gas storage facilities.
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