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EXHIBIT 99(a)
[DTE ENERGY LOGO] [MCN ENERGY GROUP INC. LOGO]
CONTACT INFORMATION:
DTE Energy Company MCN Energy Group
Investors: Investors:
Lisa Muschong Stewart Lawrence
313-235-8030 313-256-6289
muschong@dteenergy.com stewart.lawrence@mcnenergy.com
Media: Media:
Andrew Merrill/Anton Nicholas Cheryl Conway
Sard Verbinnen & Co 313-256-5504
212-687-8080 Cheryl_Conway@michcon.com
DTE ENERGY AND MCN ENERGY TO MERGE,
CREATING MAJOR ENERGY COMPANY
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DETROIT, OCTOBER 5, 1999 - DTE Energy Company ("DTE")(NYSE: DTE) and MCN
Energy Group ("MCN")(NYSE:MCN) today announced they have signed a definitive
merger agreement under which DTE will acquire all outstanding shares of MCN for
$28.50 per share in cash and stock, or a total of approximately $2.6 billion.
Including the assumption of MCN's debt, the value of the transaction
approximates $4.6 billion.
The merger has been unanimously approved by the boards of both companies.
The transaction is subject to the approval of the shareholders of both
companies, regulatory approvals and other customary merger conditions. The
transaction is expected to close in six to nine months and will be accounted
for as a purchase.
The combined company, which will be named DTE Energy Company and
headquartered in Detroit, will be the largest electric and gas utility in
Michigan and a premier regional energy provider. Through this transaction, DTE
will become a fully integrated electric and natural gas company with a strong
regional energy infrastructure and competitive operations spanning the energy
value chain. It will be a full-spectrum energy supplier supporting the
continued economic growth and development of Michigan. By combining DTE's
experience in power plant operations, coal management and power marketing with
MCN's expertise in natural gas purchasing, transportation, storage and
marketing, the combined company will be well-positioned to market coal, gas and
electricity in the region and to compete more effectively in the development of
new power plants and distributed generation.
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Upon completion of the merger, DTE will have approximately 11,500
employees, serving 2.1 million electric customers and 1.2 million natural gas
customers in Michigan. Additionally, the combined company will enjoy an
extensive customer base, investments in strategic interstate pipelines, and a
growing and profitable base of non-regulated assets. The company will have an
energy portfolio consisting of more than 11,000 megawatts of generating
capacity, 600 billion cubic feet per year of natural gas deliveries and 185
billion cubic feet of natural gas storage capacity, with assets totaling more
than $17 billion and annual revenues exceeding $6 billion.
"This strategic merger is an extraordinarily good business fit for both of
our companies," DTE Chairman, President and Chief Executive Officer (CEO)
Anthony F. Earley, Jr. said, "We are bringing together two complementary
businesses and skill sets to create a world-class, integrated energy company
with a focused strategy and the financial strength, asset mix and scale critical
to competing in today's deregulating environment. We will be able to leverage
our combined capabilities to more effectively pursue growth and expansion
opportunities available in the region spanning the corridor from the Great Lakes
to the Northeast."
MCN Chairman and CEO Alfred R. Glancy III said, "Our two companies have
embraced similar energy-related growth strategies. This combination will create
value for MCN's shareholders through both the 60.6 percent offer premium over
our closing stock price last Friday and an effective 56.5 percent dividend
increase for each share of DTE stock they receive, and will provide shareholders
an opportunity to benefit from the combined company's future growth."
Commented Earley, "The transaction is expected to be accretive to DTE's
earnings per share within the first full year of operation and will provide
immediate and meaningful operating synergies by creating economies of scale and
by leveraging the contiguous and overlapping service territories of our two
companies. The transaction is expected to produce annual cost savings of
approximately $60 million." Added Earley, "The combined company will be
well-positioned to capture the enormous growth opportunities in the attractive
Great Lakes-to-Northeast corridor, which currently accounts for about half of
the nation's total energy consumption."
Earley also said, "The talented and dedicated employees of both companies
will have opportunities for personal and career growth. The current tight
labor markets, combined with our continued growth plans, make our employees a
very valuable resource moving forward." Earley noted, "While we can never
guarantee no layoffs, both of our companies have embraced a "no layoff"
philosophy and we will work within that philosophy and make every effort to
accomplish any merger-related reductions through attrition, voluntary early
outs, reduced hiring and retraining."
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Both companies have strong union/management relations, a partnership the
combined management team will continue to nurture. These partnerships include
the Utility Workers Union of America - Local 223, International Brotherhood of
Electrical Workers - Local 17, Service Employees International Union - Local
80, and Chemical Workers - Locals 70, 132 and 799.
Earley and Glancy will continue to lead their respective companies until
the merger is completed. Upon completion of the merger, Glancy will retire from
MCN and join the Board of Directors of DTE, and Earley will serve as chairman,
president and CEO. Joining Earley in the Office of the President will be
Stephen E. Ewing, current president and chief operating officer (COO) of MCN,
who will serve as president and COO of the Gas Business; Robert J. Buckler,
president and COO of Energy Distribution; Gerard M. Anderson, president and COO
of Energy Resources; and Larry G. Garberding, executive vice president and
chief financial officer (CFO). In addition, Howard L. Dow III, currently CFO of
MCN, will serve as a senior vice president of DTE.
Upon completion of the merger, DTE's existing 12-member Board of Directors
will be expanded to include Glancy and two additional outside directors from
MCN.
MCN's gas utility, Michigan Consolidated Gas Company, and DTE's electric
utility, Detroit Edison, will retain their corporate identities and be operated
as subsidiaries of DTE.
Under the terms of the agreement, the holder of each share of common stock
of MCN can elect to receive either $28.50 in cash per share or 0.775 shares of
DTE Energy common stock per share (subject to the 55 percent cash/45 percent
stock proration procedures described in the merger agreement). DTE intends to
continue its dividend policy of $2.06 per share annually, representing a
dividend increase per share to current MCN shareholders of approximately 56.5
percent.
DTE's financial advisor on the transaction is Warburg Dillon Read LLC and
its legal advisors are Sullivan & Cromwell and Hunton & Williams. MCN's
financial advisor is Merrill Lynch & Co. and its legal advisor is Wachtell,
Lipton, Rosen & Katz.
MCN Energy Group is an integrated energy company with more than $4 billion of
assets and approximately $2 billion of annual revenues. The company primarily
is involved in natural gas production, gathering, processing, transmission,
storage and distribution, electric power generation and energy marketing. Its
largest subsidiary is Michigan Consolidated Gas Company, a natural gas utility
serving 1.2 million customers in more than 500 communities throughout Michigan.
Information about MCN Energy Group is available on the World Wide Web at
www.mcnenergy.com.
DTE Energy Company is a diversified energy provider. Its principal subsidiary
is Detroit Edison, Michigan's largest electrical utility serving 2.1 million
customers in Southeastern Michigan. DTE Energy Company's non-regulated
subsidiaries and ventures sell methane gas from landfills, coal, metallurgical
coke and other energy-related products and services. Information about DTE
Energy Company is available on the World Wide Web at http://www.dteenergy.com.
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This press release contains forward-looking statements that involve risks
and uncertainties. The results of the proposed transaction discussed
above may differ materially from those projected herein. Factors that might
cause such a difference include, but are not limited to, those discussed in
DTE Energy Company's Form 10-K for the year ended December 31, 1998 and MCN
Energy Group's Form 10-KA for the year ended December 31, 1998, each filed
with the Securities and Exchange Commission, as well as the risks and
uncertainties that are inherent in merger combinations and the realization
of anticipated operating cost synergies.
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