EXHIBIT 99.1
[Wisconsin Energy Logo] [WICOR Logo]
FOR IMMEDIATE RELEASE
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WISCONSIN ENERGY CORPORATION AND WICOR
AGREE TO $7.3 BILLION COMBINATION
MILWAUKEE (JUNE 28, 1999) - Wisconsin Energy Corporation [NYSE: WEC] and WICOR,
Inc. [NYSE: WIC] today announced that they have signed a definitive merger
agreement under which WICOR shareholders will receive a combination of cash and
stock for their WICOR shares. The transaction has an equity value of
approximately $1.275 billion plus the assumption of approximately $230 million
of WICOR debt. This agreement creates a company with a combined market
capitalization of approximately $7.3 billion ($4.5 billion in equity and $2.8
billion in debt and preferred stock). The combination will be accounted for as
a purchase and is expected to be accretive to earnings during calendar year
2001.
Under the terms of the agreement, which was approved by both companies' boards
of directors, Wisconsin Energy will acquire all of the outstanding shares of
WICOR for a fixed price of $31.50 for each WICOR share. At least 40% of the
price will be paid in Wisconsin Energy stock, and Wisconsin Energy has the
option to increase that percentage to 60%. The exchange ratio for the Wisconsin
Energy stock will be set based on the average closing prices of Wisconsin Energy
stock immediately prior to the closing. If the average is less than $22.00 per
share, Wisconsin Energy may elect to pay all cash. Each WICOR shareholder will
be able to elect to receive cash or stock, subject to proration.
The combined company will serve approximately 921,000 gas customers and more
than one million electric customers in Wisconsin and Michigan's Upper Peninsula
and will operate more than 16,500 miles of gas main and 30,000 miles of
electrical transmission and distribution wires. The combined company will have
approximately 9,000 employees. Additionally, both companies' unregulated
businesses are expected to continue to be strong growth drivers for the combined
company. In particular, WICOR's manufacturing business, which has strong
historical earnings and an attractive growth profile, will diversify the revenue
stream of the merged company.
Richard A. Abdoo, chairman, president and CEO of Wisconsin Energy, said, "The
combination of our two companies makes perfect sense, and is good news for
shareholders, customers, employees and the state of Wisconsin. The combined
company will be one of the lowest-cost energy providers in the Midwest. We will
have the ability to take advantage of new opportunities as the gas and electric
markets converge and to enhance our commitment to service reliability. By
adding WICOR's state-wide gas customer base to Wisconsin Energy's existing gas
and electric operations, the combined company will have the size, scope and
skills needed to compete in the emerging regional energy market and a solid
platform for continued growth."
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Mr. Abdoo added, "Our two companies have long histories of outstanding customer
service and community involvement. This combination of two premier Wisconsin-
based companies creates a strong corporation that will continue to contribute to
the state's vibrant economy. We have made significant contributions to regional
economic development and we're committed to continuing this tradition of
excellence. The combination strengthens our ability to control costs, improve
reliability, and increase operating efficiencies by taking advantage of both
economies of scale and the combined experience of our two workforces. The
combination is expected to result in gas rates that will be lower over the long
term than they would have been on a stand-alone basis. Together, we will be
able to offer customers new products and services, as well as the same safe,
reliable service they have come to expect."
George E. Wardeberg, chairman and CEO of WICOR, said, "The combination offers
strategic, competitive and customer advantages, plus long-term growth and
diversification opportunities that enhance both companies' ability to compete in
a changing energy market. Shareholders, customers and employees all will benefit
from this merger. Shareholders will own a financially strong company that will
be well-positioned in the marketplace, and they'll participate in the enhanced
earnings and growth potential of the combined company. Utility customers will
continue to enjoy high-quality, reliable service, delivered by a seasoned,
capable workforce, as well as improvements fostered by the joining of best
practices from both companies. Our employees will benefit by becoming part of a
company that's better equipped to play a leading role in the rapidly growing
energy industry."
Mr. Wardeberg added, "The combination also offers additional resources to
support the growth of WICOR's manufacturing group and to further develop growth
initiatives by the WICOR energy group, such as water distribution and meter
services. The combined company will vigorously pursue new products and
services, innovation and new opportunities to build growth."
Combination-related savings are anticipated to be approximately $35 million
annually beginning in 2001. Savings are projected from lower costs for fuel,
materials and services through enhanced purchasing power, elimination of
duplication through attrition and sharing of resources. It is anticipated that
there will be cost savings that come from logical consolidation of common
functions over time. No layoffs will result from the merger. The companies
anticipate that any workforce reductions resulting from the transaction will
occur through normal attrition. All union contracts will be honored.
It is anticipated that Wisconsin Energy will maintain its normal quarterly
dividend of $0.39 and payment schedule following the completion of the
transaction. WICOR pays a quarterly dividend of $0.22 per share. Both
companies will maintain their current dividend policy until the close of the
transaction.
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Mr. Abdoo will continue as chairman of the board, president and CEO of Wisconsin
Energy and Mr. Wardeberg will become vice chairman of the board of Wisconsin
Energy at the time the transaction is closed. Mr. Wardeberg will continue in
this position for 24 months, after which he plans to retire. Following Mr.
Wardeberg's retirement, he will remain a member of the Wisconsin Energy board.
After closing, in addition to Mr. Wardeberg, one other member of the current
WICOR board will join Wisconsin Energy's board.
The combined company, Wisconsin Energy Corporation, will continue to have its
headquarters in Milwaukee. WICOR, Inc. will become a wholly owned subsidiary of
Wisconsin Energy. The WICOR headquarters building, a unique landmark in the
Milwaukee area, will be retained as part of the combination.
The merger is conditioned, among other things, upon the approval of both
companies' shareholders and upon customary regulatory approvals, including the
Public Service Commission of Wisconsin. The companies anticipate that the
transaction can be completed by the spring of 2000.
Chase Securities Inc. acted as financial advisor and provided a fairness opinion
to Wisconsin Energy Corporation. Merrill Lynch & Co. acted as financial advisor
and provided a fairness opinion to WICOR, Inc.
WICOR, Inc. is a Milwaukee-based, diversified holding company operating six
subsidiaries in two industries: energy services and pump manufacturing. The
subsidiaries are Wisconsin Gas, WICOR Energy, FieldTech, Sta-Rite Industries,
SHURflo Pump Manufacturing Company and Hypro Corporation.
Wisconsin Energy Corporation is a holding company with subsidiaries in utility
and non-utility businesses. Its principal subsidiaries are Wisconsin Electric,
Edison Sault Electric, Wisvest, Minergy and Wispark.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The forward-looking
statements are subject to various risks and uncertainties. Actual results may
vary materially. Factors that could cause actual results to differ materially
include, but are not limited to: general economic conditions; business and
competitive conditions in the deregulating and consolidating energy industry, in
general, and in the companies' service territories; availability of the
companies' generating facilities, changes in purchased power costs; changes in
natural gas prices and supply availability; unusual weather; regulatory
decisions; timely realization of anticipated net cost savings; and the other
cautionary factors described in the Management's Discussion and Analysis of
Financial Condition and Results of Operations in both companies' Form 10-K for
the year ended Dec. 31, 1998; and other factors described from time to time in
the companies' reports to the Securities and Exchange Commission.
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Note to Editors: Today's news release, along with other news about Wisconsin
Energy and WICOR, is available on the Internet at www.wisenergy.com and
www.wicor.com
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CONTACTS FOR WISCONSIN ENERGY: CONTACTS FOR WICOR:
MEDIA: MEDIA:
Michael John David Fantle
Phone: (414) 221-4444 Phone: (414) 291-6930
michael.john@wepco.com david.fantle@wisconsingas.com
INVESTORS: INVESTORS:
Nancy E. Frohna Kathleen Sieja
Phone: (414) 221-2592 Phone: (414) 291-6950
nancy.frohna@wepco.com ksieja@wicor.com
or
Joe Wenzler
Phone: (414) 291-6550
joseph.wenzler@wicor.com