Combination will create nation’s
largest fully integrated electric and natural gas company
RICHMOND, VA and PITTSBURGH – Shareholders of Dominion Resources
Inc. (NYSE: D) and Consolidated Natural Gas Company (NYSE: CNG) have overwhelmingly
approved the merger of the two companies, a combination that will create the
largest fully integrated natural gas and electric company in the United States.
At a special shareholders meeting today in Richmond, independent
tabulators for Dominion Resources reported that 148.7 million shares, or 99
percent of those voted on the merger, were voted in favor of the merger. In
total, more than 90 percent of Dominion Resources’ outstanding shares were represented
at the meeting. Dominion Resources’ corporate bylaws required that a majority
of the votes cast approve the merger.
At a special shareholders meeting today in Tarrytown, N.Y.,
independent tabulators for CNG reported that 78 million shares, or 98 percent
of those voted, were voted in favor of the merger. State law in Delaware, where
CNG is incorporated, requires that a majority of the company’s 95.8 million
shares outstanding be voted in favor to approve the merger. Approximately 81
percent of CNG’s shares outstanding were voted in favor of the merger.
Dominion Resources’ corporate offices are located in Richmond.
CNG is headquartered in Pittsburgh. The combined company will be known as Dominion
Resources and will be headquartered in Richmond, but will maintain a significant
presence in Pittsburgh.
"We’re delighted that our shareholders, and those of CNG,
have endorsed this strategic combination by resounding margins," said Thos.
E. Capps, chairman, president and chief executive officer of Dominion Resources.
"Their votes today are important steps in uniting two of the country’s most
efficient energy providers with the critical mass needed to compete and thrive
in the nation’s dynamic energy marketplace.
"By affirming this unique and compelling opportunity to build
genuine long-term value, the owners of our company, and those of CNG, have acted
to promote the benefits of competition throughout the region served by our subsidiaries.
They are creating a powerful new vehicle for innovative customer service and
an exciting and rewarding workplace for our employees," Capps said.
"We are gratified by the strong support shown for the combination
of these two great companies," said George A. Davidson, Jr., CNG chairman and
chief executive officer. "It is clear that our shareholders, as well as our
customers, employees, retirees and communities, will all benefit from this merger."
Davidson also noted that CNG and Dominion Resources recently announced a joint
venture to construct four natural gas-fired electric generating units in West
Virginia, Ohio and Pennsylvania. Other joint initiatives are being developed.
"We are already showing why this merger makes good business
sense," Davidson said. "The combined company will be able to offer a complete
line of energy products as the $300 billion natural gas and electric industries
converge."
Under terms of the merger agreement, CNG shareholders will
receive a combination of Dominion Resources common shares and cash valued prior
to the merger at $66.60 for each CNG share. CNG shareholders may request all
cash, all Dominion shares or a combination of both, subject to certain limitations.
CNG shareholders will receive specific instructions at a later date explaining
how and when they will be able to exchange their shares.
The Dominion Resources-CNG combination will have approximately
4 million retail customers in five states. The merged company will own about
20,000 megawatts of electric generating capacity, more than 3 trillion cubic
feet of natural gas reserves, and will operate the largest natural gas storage
system in North America. Additionally, the merged company will be one of the
largest independent oil and natural gas exploration and production companies
on the continent.
The merger is also moving ahead on the regulatory front,
with all necessary approvals expected this fall. The Pennsylvania Public Utility
Commission last week approved the merger. The companies are working toward closing
the merger by the end of the year.
Corporate Election Services Inc. served as tabulator for
today’s Dominion Resources shareholder meeting. The CNG vote was tabulated by
Innisfree M & A Inc. CT Corp. audited the CNG tabulation.
Dominion Resources is an $18 billion holding company active
in regulated and competitive electric power, natural gas and oil development.
It has electric power and natural gas operations throughout the United States,
as well as in Canada, Argentina, Belize, Bolivia, Peru and the United Kingdom.
Its Virginia Power subsidiary serves approximately 2 million retail electric
customers in Virginia and North Carolina.
CNG is one of the nation’s largest producers, transporters,
distributors and retail marketers of natural gas. The company’s natural gas
transmission and distribution operations serve customers in Pennsylvania, Ohio,
Virginia, West Virginia, New York and other states in the Northeast and Mid-Atlantic
regions. CNG explores for and produces oil and natural gas in the United States
and Canada. The company also selectively participates in energy businesses abroad.
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This press release contains forward-looking
statements. The companies wish to caution readers that the assumptions which
form the basis for forward-looking statements with respect to or that may impact
earnings for fiscal 1999, and thereafter, include many factors that are beyond
the companies’ ability to control or estimate precisely, such as estimates of
future market conditions and the behavior of other market participants. Other
factors include, but are not limited to, weather conditions, economic conditions
in the companies’ service territories, fluctuations in energy-related commodity
prices, conversion activity, other marketing efforts and other uncertainties.
