UIL Holdings and Iberdrola USA have entered into an agreement under which UIL will acquire Southern Connecticut Gas (SCG), Connecticut Natural Gas Corporation (CNG) and Berkshire Gas Company for $1.296bn in cash, less net debt of approximately $411m, subject to post closing adjustments. The acquisition is expected to close in the first quarter of 2011.
Together, the three natural gas local distribution companies (LDCs) serve more than 333,000 natural gas customers in Connecticut and 36,000 in Massachusetts.
James Torgerson, CEO of UIL, said: “This transaction immediately transforms UIL while adding organic growth opportunities. It’s an excellent strategic fit for UIL and the gas LDCs.”
According to UIL, approximately 130,000 SCG customers reside in the service territory already served by its electric distribution company, The United Illuminating Company. UIL’s existing technical infrastructure and associated processes are well-positioned to support the planned addition of the gas LDCs.
UIL expects no impact on electric rates as a result of this transaction. The acquisition more than doubles UIL’s customer base to approximately 694,000 customers and creates a diversified energy delivery company across a larger geographic area, the company said.