NEWS
Media Contacts: Doug Kline Analyst Contacts: Mark Fisher
Enova Corporation Enova Corporation
619/696-4292 619/696-2901
Mike Mizrahi Clem Teng
Pacific Enterprises Pacific Enterprises
213/244-3030 213/244-3966
ENOVA CORPORATION, PACIFIC ENTERPRISES ANNOUNCE
AGREEMENT TO ACQUIRE AIG TRADING CORP.
AIG Trading Corp. is 10th largest natural gas marketer
Competitively Positions Merged Company in Rapidly
Changing Energy Marketplace
For Immediate Release
SAN DIEGO/LOS ANGELES (Aug. 7, 1997) - Enova Corporation and
Pacific Enterprises (PE) today jointly announced an agreement to acquire
AIG Trading Corp., a leading natural gas and power marketing firm, for
$190 million.
AIG Trading Corp.'s business primarily focuses on wholesale trading
and marketing of natural gas, power and oil. It is the 10th largest
natural gas marketer in the United States, based on volume.
Headquartered in Greenwich, Conn., AIG Trading Corp. is a
subsidiary of AIG Trading Group Inc., also based in Greenwich. AIG
Trading Corp. will become a subsidiary of the new company to be formed
by the merger of PE and Enova that was announced in October 1996.
"We are extremely pleased to acquire an energy trading and
marketing firm of AIG Trading Corp.'s capability and reputation,"
said Richard D. Farman, president and chief operating officer,
Pacific Enterprises.
"AIG Trading Corp. actively trades and markets energy commodities
to customers on a national basis and is an excellent strategic fit with
the current marketing operationsof Energy Pacific," Farman added. Energy
Pacific, a joint venture launched last March by Enova and PE, is an
unregulated energy-services company.
"This transaction establishes the wholesale commodity trading
business necessary to support our retail marketing," said Stephen L.
Baum, president and chief executive officer, Enova Corporation. "Now
we will have a full portfolio of energy services for our customers."
Farman and Baum said, "Each of our companies has reviewed the
totality of circumstances surrounding our proposed merger and remain
totally committed to its successful completion."
Enova and PE will acquire all of the outstanding common stock of
AIG Trading Corp. Each company is funding half of the acquisition,
which is expected to be accounted for as a purchase.
The acquisition will require approval from the Federal Energy
Regulatory Commission (FERC) and is expected to be completed before
the end of this year.
The merger between Enova and PE has been conditionally approved
by the FERC and a final decision is expected from the California Public
Utilities Commission in March 1998.
In 1996, AIG Trading Corp. transactions averaged over 3 billion
cubic feet of gas per day. In addition to its Greenwich headquarters,
AIG Trading Corp. also has marketing offices in Calgary and Toronto,
Canada, and Houston. The company has approximately 90 employees.
AIG Trading Corp.'s current management team will remain in place
to continue expanding its range of energy trading and marketing
businesses under the Enova/PE ownership. Four senior officers of AIG
Trading Corp. -- Steven Prince, David Messer, Todd Esse and Frank
Gallipoli -- will be principals of the new venture.
"By combining our trading and risk management capabilities
together with Enova/PE's expertise in the energy business, we expect
to be among a small group of companies able to provide a full range
of energy products and services for our customers on a national basis,"
said David Messer, President of AIG Trading Corp.
"Enova/PE's management and AIG Trading Corp. share a common
vision of tomorrow's energy marketplace," said Steven Prince, chairman
and chief executive officer of AIG Trading Corp."We are excited about
the opportunity that AIG Trading now has to contribute to Enova/PE's
growth as a competitive nationwide energy provider."
At closing, PE and Enova will establish a credit facility needed
to handle the working capital of AIG Trading Corp. The companies will
put in place long-term incentive compensation and retention
arrangements, which are expected to involve commitments of up to $35
million.
Enova Corporation (NYSE-ENA), based in San Diego, is a leading
energy company providing electricity, gas and value-added products and
services in the United States and Mexico. Enova is the parent company of
SDG&E and six other U.S.-based subsidiaries - Enova Energy, Enova
International, Enova Technologies, Enova Financial, Califia and
Pacific Diversified Capital. SDG&E serves 1.2 million electricity
customers in San Diego and southern Orange County and more than 715,000
natural gas customers in San Diego County.
Pacific Enterprises (NYSE-PET) is a Los Angeles-based energy-
services company, whose Southern California Gas Co. unit is the nation's
largest natural gas distributor, with 4.8 million customers. Pacific
Enterprises also has interstate and offshore natural gas pipelines,
centralized heating and cooling facilities and natural gas distribution
operations in Latin America.
Both Enova and PE were assisted in the transaction by outside
advisors, including the investment banking firm of Merrill Lynch & Co.
AIG TRADING CORP. ACQUISITION
FACT SHEET
COMPANY BEING
ACQUIRED AIG Trading Corp.
PARENT COMPANY AIG Trading Group, Inc., Greenwich, Conn.
BUSINESS Wholesale gas and power marketing
U.S. RANK 10th largest (natural gas trading volume)
VOLUME Averaged over 3 bcf/day
FOUNDED 1992
EMPLOYEES Approximately 90
HEADQUARTERS Greenwich
BRANCH OFFICES Calgary, B.C., Toronto, Houston
OWNERSHIP Enova Corporation (50%), Pacific
Enterprises (50%)
TRANSACTION PRICE $190 million
TERMS OF TRANSACTION Cash purchase
PROJECTED COMPLETION DATE December 1997
REGULATORY APPROVALS Federal Energy Regulatory Commission
Federal approval under the Hart-Scott-
Rodino Act
AIG TRADING CORP. MANAGEMENT Steven J. Prince
Chairman & Chief Executive Officer
David Messer
President
Enova Corporation, Pacific Enterprises Announce Agreement to Acquire AIG Trading
Corp./Page 5
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