October 16, 2017
ATLANTA -- Southern Company and Southern Company Gas today announced that Pivotal Utility Holdings, Inc., a subsidiary of Southern Company Gas, has entered into agreements to sell the assets of its utility operating divisions Elizabethtown Gas and Elkton Gas to South Jersey Industries in an all-cash transaction with an enterprise value of approximately $1.7 billion. Southern Company Gas is a subsidiary of Southern Company.
"This transaction, which we anticipate completing by third quarter 2018, will strengthen the balance sheets of Southern Company Gas and Southern Company by reducing existing financing requirements," said Thomas A. Fanning, chairman, president and CEO of Southern Company. "In addition to maximizing value for Southern Company shareholders, the transaction is beneficial to our company and aligns with our overall business strategy to drive growth and prosperity."
The transaction, which is expected to be operationally seamless to customers, is designed to ensure that Elizabethtown Gas and Elkton Gas will continue their customer-focused business model and strong commitment to safety, reliability, excellent customer service and giving back to the communities where they are privileged to serve.
South Jersey Industries is committed to providing the same level of service and reliability Elizabethtown Gas and Elkton Gas customers are accustomed to receiving today and will continue to provide service at New Jersey Board of Public Utilities (NJBPU) and Maryland Public Service Commission (MPSC) approved tariff rates. South Jersey Industries also will maintain commitments to Elizabethtown Gas and Elkton Gas employees, including honoring all collective bargaining agreements in place at the time of close and pension benefits.
The transaction will involve, among other things, approval by the NJBPU and MPSC (with respect to the Elkton Gas sale), the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain limited approvals by the Federal Energy Regulatory Commission and the Federal Communications Commission.
South Jersey Industries is an energy services holding company comprised of a natural gas utility, South Jersey Gas, which serves approximately 381,000 residential, commercial and industrial customers in the seven southernmost counties of New Jersey. South Jersey Industries also operates several non-regulated businesses that promote efficiency, clean technology and renewable energy by providing customized wholesale marketing and field management services; acquiring and marketing natural gas and electricity for retail customers; developing, owning and operating on-site energy production facilities; and offering HVAC and other energy-efficiency related services.
Goldman, Sachs & Co. LLC is serving as exclusive financial advisor and Baker Botts LLP is serving as legal counsel to Southern Company.
About Southern Company Gas
Southern Company Gas is a wholly owned subsidiary of Atlanta-based Southern Company (NYSE:SO), America's premier energy company. Southern Company Gas serves approximately 4.6 million natural gas utility customers through its regulated distribution companies in seven states and more than 1 million retail customers through its companies that market natural gas and related home services. Other nonutility businesses include investments in interstate pipelines, asset management for natural gas wholesale customers and ownership and operation of natural gas storage facilities. For more information, visit Southern Company Gas at www.southerncompanygas.com.
About Southern Company
Southern Company (NYSE: SO) is America's premier energy company, with 46,000 megawatts of generating capacity and 1,500 billion cubic feet of combined natural gas consumption and throughput volume serving 9 million customers through its subsidiaries. The company provides clean, safe, reliable and affordable energy through electric operating companies in four states, natural gas distribution companies in seven states, a competitive generation company serving wholesale customers across America and a nationally recognized provider of customized energy solutions, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and affordable prices that are below the national average. Through an industry-leading commitment to innovation, Southern Company and its subsidiaries are inventing America's energy future by developing the full portfolio of energy resources, including carbon-free nuclear, 21st century coal, natural gas, renewables and energy efficiency, and creating new products and services for the benefit of customers. Southern Company has been named by the U.S. Department of Defense and G.I. Jobs magazine as a top military employer, recognized among the Top 50 Companies for Diversity by DiversityInc, listed by Black Enterprise magazine as one of the 40 Best Companies for Diversity and designated a Top Employer for Hispanics by Hispanic Network. The company has earned a National Award of Nuclear Science and History from the National Atomic Museum Foundation for its leadership and commitment to nuclear development and is continually ranked among the top energy companies in Fortune's annual World's Most Admired Electric and Gas Utility rankings. Visit our website at www.southerncompany.com.
Cautionary Note Regarding Forward-Looking Statements
This communication contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements concerning the pending transactions. These forward-looking statements are often characterized by the use of words such as "expect," "anticipate," "plan," "believe," "may," "should," "will," "could," "continue", "opportunity" and the negative or plural of these words and other comparable terminology. Although Southern Company and Southern Company Gas believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements. Actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: the failure to receive, on a timely basis or otherwise, the required approvals by government or regulatory agencies (including the terms of such approvals); the risk that a condition to closing of the transactions may not be satisfied; and other risk factors relating to the energy industry, as detailed from time to time in Southern Company's and Southern Company Gas' reports filed with the Securities and Exchange Commission. There can be no assurance that the transactions will in fact be consummated.
Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found under Item 1.A. in Southern Company's and Southern Company Gas' Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The foregoing list of important factors that may affect future results is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. All subsequent written and oral forward-looking statements concerning the transactions or other matters attributable to Southern Company or Southern Company Gas or any other person acting on their behalf are expressly qualified in their entirety by the cautionary statements referenced above. The forward-looking statements contained herein speak only as of the date hereof. Southern Company and Southern Company Gas undertake no obligation to update or revise any forward-looking statement, except as may be required by law.