Southern Union Completes Acquisition of Panhandle Eastern Pipe Line Company & Subsidiaries
WILKES-BARRE, Pa.--Southern Union Company ("Southern Union" or the "Company") (NYSE:SUG) announced today that it has completed its acquisition of Panhandle Eastern Pipe Line Company and its subsidiaries ("Panhandle Energy") from CMS Energy Corporation ("CMS") (NYSE:CMS). The acquired assets include Panhandle Eastern Pipe Line, Trunkline Gas, Sea Robin Pipeline, Trunkline LNG and Southwest Gas Storage.
Southern Union paid CMS approximately $584.3 million in cash plus 3 million shares of Southern Union common stock as a consideration for receiving all of the stock of Panhandle Energy, while approximately $1.159 billion of debt remains outstanding at Panhandle Energy. Southern Union financed the acquisition with approximately $420 million in cash proceeds it received for the January 1, 2003 sale of its Texas operations, $125 million of the net proceeds from concurrent securities offerings, which it also completed today, and with working capital available to the Company.
George L. Lindemann, Chairman and Chief Executive Officer of Southern Union, stated, "We welcome Panhandle Energy, its customers and employees to the Southern Union family. We are steadfast in our conclusion that this acquisition will be immediately accretive to our earnings. All efforts are now aimed at ensuring the swift and successful integration of Panhandle Energy."
Southern Union recently provided Fiscal Year 2004 consolidated earnings guidance of $1.35 - $1.50 per share, which reflected both public offerings that it closed today, as previously discussed, and the consummation of the Panhandle Energy acquisition by June 30, as well as normal weather in its service areas, normal conditions in its industries and success in its Fiscal Year 2004 integration plans for Panhandle.
Berenson & Company was a financial advisor to Southern Union in this transaction.
Southern Union Company (NYSE: SUG), headquartered in Wilkes-Barre, Pennsylvania, is engaged primarily in the transportation and distribution of natural gas. With this acquisition, the Company now owns and operates more than 10,000 miles of interstate pipelines that transport natural gas from the Gulf of Mexico, South Texas and the Panhandle regions of Texas and Oklahoma to major U.S. markets in the Midwest and Great Lakes region. In addition, the Company also owns and operates the nation's largest liquefied natural gas import terminal. Through its local distribution companies, Southern Union also serves approximately 1 million natural gas end users in Missouri, Pennsylvania, Massachusetts and Rhode Island. For further information, visit www.southernunionco.com.
This release and other Company reports and statements issued or made from time to time contain certain "forward-looking statements" concerning projected future financial performance, expected plans or future operations. Southern Union Company cautions that actual results and developments may differ materially from such projections or expectations.
Important factors could cause actual results to differ materially from the forward-looking projections or expectations. These factors include, but are not limited to: weather conditions or weather-related damage in the Company's service territories; technological developments in energy production, delivery and usage; cost of gas or availability due to higher demand, shortages, transportation problems or other developments, environmental incidents, or gas pipeline system constraints; regulatory and court decisions; the receipt of timely and adequate rate relief; the achievement of efficiencies and the purchase and implementation of new technologies for attaining such efficiencies; disruptions in the normal commercial insurance and surety bond markets that may increase costs or reduce traditional insurance coverage; impact of relations with labor unions of bargaining unit employees; the effect of any stock repurchases; and the effect of strategic initiatives (including any recent, pending or potential acquisition or merger, recent corporate restructuring activities, sales of non-core assets, and any related financing arrangements including refinancings and debt repurchases) on earnings and cash flow.
CONTACT: Southern Union Company
Richard N. Marshall, 570/829-8662 Treasurer & Director of Investor Relations or
Media Relations: Jennifer K. Cawley, 570/829-8839 Director of Corporate Communications