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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported) February 9, 1999
SOUTHERN UNION COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-6407 75-0571592
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organiza- File Number) Identification No.)
tion)
504 Lavaca Street, Eighth Floor 78701
Austin, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(512) 477-5852
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ITEM 5. OTHER EVENTS
Southern Union Company (the "Company") confirmed on February 22,
1999 that it had submitted a proposal to the Board of Directors
of Southwest Gas Corporation ("Southwest Gas") to acquire all of
Southwest Gas' outstanding common stock for $32 per share in cash
pursuant to a merger agreement on terms essentially the same
(except for price) as Southwest Gas' pending merger agreement
with ONEOK, Inc.
An acquisition of Southwest Gas would increase Southern Union's
customer base by 1.2 million customers, to total more than 2.2
million customers. Currently, Southern Union serves customers in
Texas, Missouri, Florida and Mexico. Southwest Gas serves
customers in Nevada, Arizona and California.
ITEM 7. EXHIBIT
20(a) Southern Union Company press release dated
February 22, 1999 announcing its proposal to acquire
Southwest Gas Corporation's outstanding common stock
at $32 per share pursuant to a merger.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SOUTHERN UNION COMPANY
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(Registrant)
Date February 24, 1999 By RONALD J. ENDRES
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Ronald J. Endres
Executive Vice President and
Chief Financial Officer
Date February 24, 1999 By DAVID J. KVAPIL
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David J. Kvapil
Senior Vice President and
Corporate Controller
(Principal Accounting Officer)
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EXHIBIT 20(a)
SOUTHERN UNION CONFIRMS MERGER PROPOSAL FOR SOUTHWEST GAS
-- Would Offer $32 Per Share in Cash --
- - -- Merger Would Create Nation s Largest Gas-Only Distribution
Company --
AUSTIN, Texas (February 22, 1999) -- Southern Union Company
(NYSE:SUG) today confirmed that it has submitted a proposal to
the Board of Directors of Southwest Gas Corporation (NYSE:SWX)
regarding a possible business combination. Southern Union also
confirmed that it is commencing due diligence with respect to
entering into a merger agreement under which Southern Union would
acquire all of the outstanding common stock of Southwest Gas for
$32.00 per share in cash. The transaction would be accounted for
as a purchase and Southern Union expects that it would be immedi-
ately accretive to Southern Union s cash flow. There can be no
assurances that any transaction will result from the companies
discussions.
A combination with Southwest Gas would make Southern Union the
nation s largest gas-only distribution company, increasing
Southern Union s customer base by 1.2 million customers, to total
more than 2.2 million customers. Southern Union serves customers
in Texas, Missouri, Florida, and Mexico. Southwest Gas serves
customers in Nevada, Arizona, and California.
George L. Lindemann, chairman and chief executive officer of
Southern Union Company, said, "A combination of Southwest Gas and
Southern Union is an excellent opportunity for shareholders,
employees and customers of both companies. Southwest Gas share-
holders would receive a significant premium for their investment
over Southwest s pending merger agreement with ONEOK. Addi-
tionally, we believe that Southwest s rapidly growing customer
base combined with Southern Union s experience as one of the most
cost-effective operators in the industry would create significant
value for shareholders. This combination would create great
opportunities for both companies customers and employees."
Mr. Lindemann also stated, "The proposed transaction would repre-
sent the second time Southern Union has doubled its size in a
single transaction--the first being its successful 1994 acquisi-
tion of Missouri Gas Energy."
Peter H. Kelley, president and chief operating officer of
Southern Union, said, "We expect to make the same commitments to
Southwest Gas various constituencies as those made in its
agreement with ONEOK." Under the proposal, Southwest Gas would
operate as the Southwest Gas Division of Southern Union, head-
quartered in Las Vegas, Nevada, and retain its name in the local
markets it serves. In addition, three Southwest Gas Board
members would be invited to join Southern Union s Board. The
remaining Southwest Gas Board members would be invited to serve
on an Advisory Board for the Southwest Gas Division. Southern
Union does not contemplate any layoffs as a result of the
proposed transaction and would seek to minimize future employee
adjustments through a combination of reduced hiring, attrition
and voluntary separation packages. Southern Union would honor
any existing union contracts.
Consummation of the transaction would be subject to, among other
things, approvals by customary state and federal regulatory
agencies and Southwest Gas shareholders.
In order to protect the interests of its employees, customers and
shareholders, Southern Union does not anticipate making addi-
tional comments with respect to the discussions until a defini-
tive agreement is reached or the discussions are terminated.
Southern Union is an international energy distribution company
serving more than one million customers through: three
divisions--Southern Union Gas, Missouri Gas Energy, and Atlantic
Utilities; SUPro Energy Company and Atlantic Gas Corporation, its
propane distribution subsidiaries; and its equity ownership in a
natural gas distribution company serving Piedras Negras, Mexico.
# # #
This release and other Company reports and statements issued or
made from time to time contain certain "forward-looking state-
ments" concerning projected future financial performance,
expected plans or future operations. Southern Union Company
cautions that actual results and developments may differ
materially from such projections or expectations. In addition,
past performance or results are not necessarily an indication of
future performance or results, which cannot be guaranteed.
Investors should be aware of important factors that could cause
actual results to differ materially from the forward-looking pro-
jections or expectations. These factors include, but are not
limited to: weather conditions in the Company s service terri-
tories; cost of gas; regulatory and court decisions; the receipt
of timely and adequate rate relief; the achievement of operating
efficiencies and the purchase and implementation of new tech-
nologies for attaining such efficiencies; impact of relations
with labor unions of bargaining-unit employees; and the effect of
strategic initiatives on earnings and cash flow. Most of these
factors are difficult to accurately predict and are generally
beyond the control of the Company.
Contact: George Yankowski
Southern Union Company
504 Lavaca, Suite 800
Austin, Texas 78701
Phone: 512 370-8305
Fax: 512 477-3879
