Exhibit 99.1
nationalgrid KEYSPAN
For Immediate Release
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NATIONAL GRID TO ACQUIRE KEYSPAN
IN $7.3 BILLION CASH TRANSACTION
Acquisition Will Create The Third-Largest Energy Delivery Utility In The US
Excellent Strategic and Operational Fit
National Grid To Maintain Significant Corporate Presence
In Massachusetts, Brooklyn And Upstate New York
Westborough, Mass. and Brooklyn, New York, February 27, 2006 -
National Grid (LSE: NG., NYSE: NGG) and KeySpan Corporation (NYSE: KSE)
today announced a definitive agreement under which National Grid will acquire
KeySpan for $42.00 per share in cash. The terms of the agreement value KeySpan
at approximately $7.3 billion, with an enterprise value of $11.8 billion. The
boards of both companies unanimously approved the acquisition. The transaction
materially expands the size of National Grid's US operations and creates the
third-largest energy delivery utility in the United States, with well balanced
electricity and gas businesses serving nearly eight million customers in the New
York State and New England regions.
"KeySpan is an excellent operational and geographic fit and a natural
extension of our business and our strategy," said Roger Urwin, National Grid
Group Chief Executive. "KeySpan is an acquisition which makes sense at every
level and we look forward to its completion and to welcoming Robert Catell,
KeySpan's Chairman and Chief Executive Officer, to our Board."
Said Steve Holliday, Chief Executive Designate of National Grid, "KeySpan
is a high quality business with significant growth prospects. The acquisition
provides us with an excellent opportunity to combine our core operational
expertise with that of KeySpan, while continuing to provide safe and reliable
service to customers. National Grid and KeySpan customers will benefit by being
served by a larger, stronger company that is focused on energy delivery, and has
a growing presence and strategic commitment to the region."
Michael E. Jesanis will remain Chief Executive Officer of National Grid
USA. Robert B. Catell, will become Executive Chairman of National Grid USA and
Deputy Chairman of National Grid plc.
Holliday continued, "Bob is a highly respected and superb leader with a
strong track record in delivering growth, while maintaining a sharp focus on
customer satisfaction."
Said Robert B. Catell, Chairman and Chief Executive Officer of KeySpan,
"This transaction will deliver significant value to shareholders and customers
of both companies. KeySpan will become an important part of one of the largest
and most efficient energy delivery companies in the world, and have access to
additional financial resources to invest in our energy infrastructure and growth
opportunities. Together, we can create an even more efficient company focused on
controlling delivery costs and enhancing customer service. Further, we will
continue to work with state regulators to structure long-term rate plans that
benefit customers and shareholders and include incentives for cost control and
superior customer service."
Michael E. Jesanis, President and Chief Executive Officer of National Grid
USA, said, "National Grid and KeySpan have much in common, including a talented
and diverse workforce with proud traditions extending back over a century. We
share a core business of energy delivery - both gas and electricity - and serve
many of the same communities in Massachusetts, as well as customers in New York
and New Hampshire. We will be working closely together on integration planning
that will enable our companies to come together seamlessly once the transaction
closes and we look forward to a smooth transition for our customers and those of
the Long Island Power Authority (LIPA)."
KeySpan operates LIPA's transmission and distribution system under contract
to LIPA. LIPA is a non-profit electric utility, which owns the retail electric
system on Long Island and provides electric service to nearly 1.1 million
customers in Nassau and Suffolk counties, and the Rockaway Peninsula in Queens,
NY. KeySpan and LIPA recently agreed to extend their existing relationship
through 2013.
Upon completion of the transaction, KeySpan will become a wholly owned
subsidiary of National Grid and will continue to operate as KeySpan. National
Grid will continue to have customer-focused operations throughout its four-state
service territory (Massachusetts, New Hampshire, New York and Rhode Island) and
will maintain a significant corporate presence in Massachusetts, Brooklyn, NY
and Upstate New York, as well as an operations center in Hicksville, NY.
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National Grid will honor all labor agreements in effect with the
KeySpan unions. Plans on combining operations, facilities and functions,
including determination of the impact on total number of jobs, will be developed
over the next year. Employee reductions are expected to be achieved through
attrition and voluntary programs across the combined company.
Both companies have excellent records of corporate citizenship and
community involvement, and National Grid has committed to maintain the historic
level of support in KeySpan's service territory.
The transaction is subject to customary closing conditions, including the
approval of the shareholders of both companies, certain federal and state
regulatory approvals and clearance under the Hart-Scott-Rodino Act. The
transaction is targeted to close by early 2007.
KeySpan is the fifth largest distributor of natural gas in the United
States and the largest in the Northeast, and is one of the fastest growing
distributors in the country. The company's investments in gas pipelines and
storage will enable National Grid to take advantage of a broader range of future
opportunities in the US. KeySpan's uniquely positioned and attractive generation
assets provide power to New York City's load serving entities and LIPA under
long term contracts. National Grid has no current plans to divest this
portfolio.
Rothschild is serving as financial advisor to National Grid. Skadden, Arps,
Slate, Meagher & Flom LLP is serving as legal advisor to National Grid. Lazard
and Simpson Thacher & Bartlett LLP served as financial and legal advisors,
respectively, to KeySpan.
About National Grid
National Grid is an international energy delivery business with principal
activities in the regulated electricity and natural gas industries. In the U.S.,
National Grid transmits and distributes electricity and natural gas to nearly 4
million customers across 29,000 square miles of Massachusetts, New Hampshire,
New York and Rhode Island.
KeySpan is National Grid's fifth US acquisition. Previously, it had
acquired New England Electric System and Eastern Utilities Associates (2000),
and Niagara Mohawk (2002). Earlier this month, National Grid announced that it
will acquire the Rhode Island gas distribution business of Southern Union
Company.
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The company owns the high-voltage electricity transmission network in
England and Wales and operates the system across Great Britain. It also owns and
operates the high-pressure gas transmission system in Britain and, through its
natural gas distribution business serves over 11 million meters in homes and
businesses in Britain. In addition, it has a number of businesses operating in
related areas such as LNG importation, wireless infrastructure for broadcast and
telecommunications, property, metering and interconnectors.
About KeySpan
A member of the Standard & Poor's 500 Index, KeySpan is the largest
distributor of natural gas in the Northeast, operating regulated gas utilities
in New York, Massachusetts, and New Hampshire that serve 2.6 million customers.
These customer-focused businesses are complemented by a portfolio of service
companies that offer energy-related products, services, and solutions to homes
and businesses. KeySpan is also the largest electric generator in New York
State, with approximately 6,650 megawatts of generating capacity that provides
power to 1.1 million customers of the Long Island Power Authority (LIPA) on Long
Island and supplies approximately 25 percent of New York City's capacity needs.
KeySpan also operates LIPA's transmission and distribution system under contract
to LIPA. In addition to these assets, KeySpan has strategic investments in
pipeline transportation, distribution, storage, and production. KeySpan has
headquarters in Brooklyn, New England, and Long Island. For more information,
visit KeySpan's web site at: http://www.keyspanenergy.com.
Important Information
In connection with the proposed merger, KeySpan will file a proxy statement
with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, AS IT WILL
CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the proxy statement, when available, and other documents filed by
KeySpan at the Securities and Exchange Commission's web site at
http://www.sec.gov. KeySpan and its directors, executive officers and other
members of its management and employees may be deemed to be participants in the
solicitation of proxies from its stockholders in connection with the proposed
merger. Information concerning the interests of KeySpan's participants in the
solicitation is set forth in KeySpan's proxy statement and Annual Report on Form
10-K filed (filed with the Securities and Exchange Commission on March 30, 2005
and March 2, 2005, respectively) and will be set forth in the proxy statement
relating to the merger when it becomes available.
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UK Analyst/Investor Conference Call Information:
National Grid plc will conduct an analyst/investor call at 9:30 a.m. (London
time) 4:30 a.m. (EST) regarding the transaction. To access the event, dial
1-866-432-7186 (international calls dial 011 44 20 7081 9429) or link to
www.ngrid.com. A replay of the analyst/investor call will be available until
March 13, 2006 by dialing 011 44 20 7081 9440 and entering access code 869448
and recording number 355761. There will also be a debt investor conference call
at 12:00 p.m. (London time). To access the event, dial 011 44 20 7162 0025.
Brooklyn, NY and Boston, MA Press Conferences Information:
National Grid and KeySpan will hold press conferences today in Brooklyn, NY and
Boston, MA to discuss the transaction. The Brooklyn, NY press conference will be
held at 10:00 a.m. (EST) at the Company's headquarters, One MetroTech Center,
Brooklyn, NY. To access the event, dial 1-866-425-6191 (international callers
dial 1-973-935-2981) and use passcode 7087138. A replay of the press conference
will be available for 30 days. To access the replay, dial 1-877-519-4471
(International callers dial 1-973-341-3080) and enter passcode 7087138. The
event will also be available on
http://nationalgridkeyspan.acquisitionannouncement.com.
The Boston press conference will be held at 3:00 p.m. (EST) at the Westin Copley
Place, 10 Huntington Avenue, Boston, MA.
B-roll Information:
Satellite feed containing b-roll footage of National Grid and KeySpan will be
available for downlink as follows:
Today, Monday February 27, 2006
04:00-04:15 EST
AMC 1 / (C) band tr. 22 ANALOG
d/l freq: 4140 Horizontal
13:00-13:15 EST (1pm-1:15PM)
AMC 1 / (C) band tr. 22 ANALOG
d/l freq: 4140 Horizontal
This feed is free for unrestricted use.
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Media Contacts:
National Grid KeySpan
Denise DesChenes/Jonathan Gasthalter/ Jody Fisher
Susan Burns Manager Media Relations
Citigate Sard Verbinnen 718/403-2503
212/687-8080 jfisher@keyspanenergy.com
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Carmen Fields
Director, Media/
Corporate Relations
781-466-5096
cfields@keyspanenergy.com
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