ATLANTA (CBS) — Atlanta-based AGL Resources is purchasing the suburban Chicago Nicor gas company for $2.4 billion.
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Nicor said in a news release that AGL Resources will buy Nicor for $2.4 billion in cash and stock. Once the deal is done, current AGL shareholders will own about two thirds of the new company, while current Nicor shareholders will own about one third.
A news release says the new company will be a leading U.S. natural gas distribution company, with about $5.1 billion in annual revenues, and subsidiaries serving 4.5 million in Illinois, Georgia, New Jersey, Virginia, Florida, Tennessee and Maryland. There are also more than 1 million customers that will be served by unregulated businesses controlled by the company.
“This is an exciting transaction for both AGL Resources and Nicor,” John W. Somerhalder II, AGL Resources’ chairman, president and chief executive officer, said in a news release. “Together we will establish a platform for growth that is superior to what either company could achieve on its own.”
The Citizens Utility Board, a local consumer watchdog group, has some concerns about the plan.
“A key question is whether a southern-based company accustomed to managing smaller utilities would have the expertise to deal with the utility of Nicor’s size and Nicor’s location,” said CUB spokesman Jim Chilsen. “Frigid Chicago is a long way from Atlanta, Georgia.”
Naperville-based Nicor serves 2.2 million customers in the northern third of Illinois, excluding the city of Chicago which is served by Peoples Energy.