The Missouri Public Service Commission has unanimously approved a merger between the two largest natural gas companies under its jurisdiction.
Under the agreement, Laclede Gas Company will buy the natural gas operations of Missouri Gas Energy. Once complete, the company will serve more than 1.1 million natural gas customers in Missouri.
Laclede has stated that it intends to own and operate two divisions in Missouri, the MGE Division and the Laclede Division.
The purchase price for MGE was $975 million. The approval is effective July 31, 2013, and permits closing on the transaction on or after September 1, 2013. Laclede Gas was also authorized to complete the financing necessary to support the acquisition.
“We are excited to reach this critical milestone and be able to close on this transformative transaction over the next several weeks,” said Suzanne Sitherwood, president and CEO of The Laclede Group. “Our integration work is already well underway. We look forward to welcoming the customers of MGE and providing them with safe, reliable and efficient service and adding MGE employees to the Laclede family,” she added.
Under the agreement, Laclede will be under a general rate case moratorium, and will not file a general rate case for its Laclede service territory prior to October 1, 2015, unless there is a significant unusual event that has a major impact on any of its Missouri service territories.
Laclede will be permitted, under the agreement, to file a general rate case for its MGE Division service territory by no later than September 18, 2013. If Laclede does not file a general rate case for its MGE service territory by September 18, 2013, then Laclede will not file a rate case for its MGE division service territory prior to October 1, 2015.
Under the agreement, any acquisition premium paid for MGE in connection with the transaction shall not be recovered in retail distribution rates. The acquisition premium is the total purchase price above net book value.
Laclede and MGE, under the terms of the agreement, will continue to provide all service quality reporting and both will strive to meet or exceed the customer service and operational performance levels currently provided to its customers.