National Grid Group is Acquiring New England Electric System
National Grid Group plc is acquiring all of the outstanding shares of New England Electric System (NEES). According to the terms of the merger agreement, NEES shareholders will receive $53.75 in cash (subject to upward adjustment) for each NEES share held. The terms value the equity of NEES at approximately $3.2 billion and represent a premium of 25% above the closing price of NEES shares on Dec. 11, 1998.
National Grid is the owner and operator of the England and Wales high-voltage transmission network, including interconnectors with Scotland and France. According to Rick Sergel, president and chief executive officer of NEES: "For NEES and our employees, this transaction not only keeps jobs in New England, it represents a tremendous opportunity for growth as the base of U.S. operations for a large and successful company." He also said: "Most important, our customers will continue to receive the same great service from the same people in the yellow trucks, 24 hours a day; and they will continue to receive rates among the lowest in the region. The only difference is that we will have the resources of an international leader behind us."
Rick Sergel will continue as president and chief executive officer of NEES and will join the National Grid Board as an executive director, together with one of NEES's outside directors. Alfred D. Houston, NEES chairman, will step down upon the closing of the merger, and will serve as a consultant for two years. A NEES advisory board will be established for two years. Upon completion of the acquisition, NEES will become a wholly owned subsidiary of National Grid. NEES and its subsidiary names will remain the same. Headquarters for U.S. operations will remain in Massachusetts, and the strong links forged by NEES with its local communities in Massachusetts, Rhode Island and New Hampshire will be maintained, according to National Grid.
The acquisition is subject to a number of regulatory and other approvals and consents, including approvals by the U.S. Securities and Exchange Commission, Federal Energy Regulatory Commission, and Nuclear Regulatory Commission, support from the states in which NEES operates, and Hart-Scott-Rodino approval. The acquisition also requires approval by shareholders of both companies, and is expected to be completed by early 2000.
NEES is a public utility holding company headquartered in Westborough, MA. Its subsidiaries Massachusetts Electric Company, Narragansett Electric Company, Granite State Electric Company, and Nantucket Electric Company serve approximately 1.3 million customers in Massachusetts, Rhode Island and New Hampshire.