KeySpan shareholders OK National Grid merger

KeySpan’s shareholders have voted overwhelmingly to approve the company’s acquisition by British utility National Grid.

The combined company will create the third-largest energy delivery utility in the United States, delivering gas and electricity to 8 million customers in the Northeast.

“Overall, the merger will deliver about $1 billion in additional shareholder value and a 16 to 20 percent premium based on a $35 to $36 share price … a figure very consistent with today’s utility deals,” said Robert Catell, chairman and CEO of KeySpan Corp. in a speech to shareholders at an Aug. 17 meeting. “But this merger goes beyond size, scope and scale. It goes beyond the strength of the balance sheet … and our favorable geographic fit. Because beyond these reasons, National Grid’s values, goals and objectives are very similar to KeySpan’s. They are deeply customer-focused, actively engaged in the community, have a steadfast commitment to the environment and have a deep-rooted commitment to employees. Taken together, these attributes will allow us to achieve a number of things that neither company could achieve as well on their own.”

National Grid’s shareholders on July 31 also approved the transaction.

The companies are waiting for approval of the $7.3 billon deal from the Federal Energy Regulatory Commission, expected in October, and the public utility commissions of New Hampshire, New Jersey and New York – actions that are anticipated in early 2007.

Brooklyn, N.Y.-based KeySpan Corp. is the largest distributor of natural gas in the Northeast with 2.6 million customers in New Hampshire, Massachusetts and New York.

National Grid, headquartered in the United Kingdom, runs about 4,500 miles of power lines and 4,300 miles of gas pipelines in Britain. — CINDY KIBBE