Wisconsin Energy, Wicor agree to merge

July 12, 1999
Wisconsin Energy Corp. and Wicor Inc. have signed a definitive merger agreement worth an estimated $1.5 billion.

Wisconsin Energy Corp. and Wicor Inc. have signed a definitive merger agreement worth an estimated $1.5 billion.

Under terms of the agreement, Wicor shareholders will receive a fixed price of $31.50 for each share, to be paid in a combination of cash and Wisconsin Energy stock, with at least 40% of payments constituting stock. The deal will be accounted for as a purchase.

The combined company will serve about 921,000 gas customers and more than 1 million electric customers in Wisconsin and the Upper Peninsula of Michigan. It will operate more than 16,500 miles of gas main and 30,000 miles of electrical transmission and distribution wires.

The new firm will have a market capitalization of $7.3 billion.

"Both companies` unregulated businesses are expected to continue to be strong growth drivers for the combined company," said Wisconsin Energy. "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."

Wisconsin Energy Chairman Richard Abdoo said, "The combined company will be one of the lowest-cost energy providers in the (U.S.) 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."

The companies expect to save $35 million/year beginning in 2001 as a result of the combination. Savings will come from lower costs for fuels, materials, and services and from elimination of duplication.

Following completion of the merger, Abdoo will be chairman, president, and CEO of the new Wisconsin Energy. Wicor will become a wholly owned subsidiary, headed by current Wicor Chairman and CEO George Wardeberg for 24 months, after which he will retire. The company will be based in Milwaukee, where both firms have their headquarters.