Mergers & Acquisitions
CP&L + Florida Progress. Carolina Power & Light announced Aug. 23 that it would purchase Florida Progress Corp. for $5.3 billion in a combination that would create the nation's ninth-largest utility in terms of generating capacity, with $6.7 billion in annual revenues and 2.5 million customers in three states. CP&L would pay a premium (between 16.5 percent and 21 percent) over the pre-announcement share price of FP stock.
The utilities predict merger savings of over $100 million per year - in part by eliminating 7 percent (1,250) of job positions (CP&L has 7,650 employees, FP 9,600) - but promise no layoffs until merger completion, expected next summer.
"We will try to manage this downsizing through attrition," said CP&L chairman, president and CEO William Cavanaugh, who will lead the new company in those positions.
Western Resources + KCP&L. Progress emerged on three fronts as regulators in Missouri and Kansas and at the Federal Energy Regulatory Commission all took some action on the proposed merger between Western Resources Inc. and Kansas City Power & Light Co., to form Westar Energy.
* Missouri. Missouri regulators approved the merger through an uncontested stipulation and agreement providing for a three-year electric rate moratorium effective the date the merger closes, plus a $5 million rate credit to Missouri retail electric customers in the 14th month after the merger and a rate base reduction as well if the merger is treated as a taxable transaction by the Internal Revenue Service. Case No. EM-97-515, Sept. 2, 1999 (Mo.P.S.C.).