Filed by: NiSource Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Columbia Energy Group
Registration Statement File No: 333-33896
On July 26, 2000, NiSource and Columbia announced that the
Federal Energy Regulatory Commission has approved the merger of the
two companies. The text of the joint press release follows:
JOINT PRESS RELEASE
JULY 26, 2000
CONTACTS:
MEDIA
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NiSource Sally A. Anderson
(219) 647-6203
Columbia - R.A. Rankin, Jr.
(703) 561-6044
INVESTOR RELATIONS
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NiSource - Dennis Senchak
(219) 647-6085
Columbia Melissa E. Bockelmann
(703) 561-6011
FERC APPROVES NISOURCE-COLUMBIA ENERGY GROUP MERGER;
TRANSACTION AWAITS SEC APPROVAL FOR COMPLETION
MERRILLVILLE, Ind., and HERNDON, Va. (July 26, 2000) - NiSource
Inc. and Columbia Energy Group today announced they have received
merger approval from the Federal Energy Regulatory Commission (FERC).
The merger now requires the approval of the U.S. Securities and
Exchange Commission (SEC) in order to complete the $6 billion
transaction announced Feb. 28.
The FERC today approved the combination under the Federal Power
Act (FPA). The FERC concluded that the NiSource-Columbia merger
satisfies FPA requirements and the standards defined in the FERC's
Merger Policy Statement, in that it will not adversely affect
competition, impair the effectiveness of regulation or result in rate
increases for wholesale electric or transmission customers.
The FERC also said that in approving the merger it relied on
NiSource's stated commitment that Northern Indiana Public Service
Company (NIPSCO), its electric utility subsidiary, will join a
Regional Transmission Organization (RTO) as provided for by FERC Order
Number 2000, within one year of the close of the merger.
"We appreciate the FERC's timely approval of our merger with
Columbia, and fully support its efforts to open electric and natural
gas markets to increased competition," said Gary L. Neale, NiSource
chairman, president and chief executive officer.
Oliver G. Richard III, chairman, president and chief executive
officer of Columbia Energy Group, said, "The FERC approval and the
nine state actions, which have been received expeditiously, are major
steps toward completion of the merger between our two companies.
These actions are underscored by the combined companies' ongoing
commitment to open markets."
The NiSource-Columbia merger is expected to close by the end of
the year. The combined company will serve more than 4 million
customers primarily located in nine states. Its operations will span
the high-growth energy corridor extending from the Gulf of Mexico to
Chicago to New England, creating the largest natural gas distributor
east of the Rockies, with wholesale and retail electric operations.
The FERC approval follows similar state actions regarding the
companies' distribution companies in Virginia, Pennsylvania, Indiana,
Maryland, Kentucky, Massachusetts, Ohio, Maine and New Hampshire. The
transaction also recently cleared the waiting period under Hart-Scott-
Rodino Antitrust Improvements Act at the U.S. Department of Justice
and the Federal Trade Commission. Shareholders of both companies
approved the merger in June.
NIPSCO generates and distributes electricity to about 426,000
customers in 30 counties in northern Indiana, owns and operates four
coal-fired generating stations, two hydroelectric generating plants
and four gas-fired combustion turbine generating units, providing a
total system net capability of 3,392 megawatts. NIPSCO's electric
retail rates and services in Indiana will continue to be regulated by
the Indiana Utility Regulatory Commission following the merger. The
only Columbia subsidiary subject to FPA jurisdiction as a public
utility is Columbia Energy Power Marketing (CEPM) Corporation.
NiSource Inc. (NYSE: NI) is a holding company with headquarters
in Merrillville, Ind., whose primary business is the distribution of
electricity, natural gas and water in the Midwest and Northeastern
United States. The company also markets utility services and
customer-focused resource solutions along a corridor from Texas to
Maine. More information about the company is available on the
Internet at www.nisource.com
Columbia Energy Group (NYSE: CG), based in Herndon, Va., is one
of the nation's leading energy services companies. Its operating
companies engage in nearly all phases of the natural gas business,
including exploration and production, transmission, storage and
distribution, as well as propane and petroleum product sales and
electric power generation. More information about Columbia is
available on the Internet at www.columbiaenergygroup.com.
This release contains forward-looking statements within the
meaning of the federal securities laws. These forward-looking
statements are subject to various risks and uncertainties. The
factors that could cause actual results to differ materially from
the projections, forecasts, estimates and expectations discussed
herein include factors that are beyond the companies' ability to
control or estimate precisely, such as estimates of future market
conditions, the behavior of other market participants and the
actions of the federal and state regulators.
Other factors include, but are not limited to, actions in the
financial markets, weather conditions, economic conditions in the
two companies' service territories, fluctuations in energy-
related commodity prices, conversion activity, other marketing
efforts and other uncertainties. These and other risk factors
are detailed from time to time in the two companies' SEC reports.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of
this release. The companies do not undertake any obligation to
publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date of
the document.
In addition to other documents filed with the Securities and
Exchange Commission by the two companies, NiSource and the new
holding company have filed a registration statement, which
contains a joint proxy statement/prospectus for NiSource and
Columbia Energy. The final joint proxy statement/prospectus,
dated April 24, 2000, is available and has been distributed to
the companies' shareholders. Investors and security holders are
urged to read the joint proxy statement/prospectus and any other
relevant documents filed with the SEC because they contain
important information. Investors and security holders may
receive the joint proxy statement/prospectus and other documents
free of charge at the SEC's Web site, www.sec.gov, from NiSource
Investor Relations at 801 East 86th Avenue, Merrillville, Indiana
46410 or at its Web site, www.nisource.com, or from Columbia
Investor Relations at 13880 Dulles Corner Lane, Herndon, Virginia
20171 or at its Web site, www.columbiaenergygroup.com.
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