Filed by: NiSource Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Columbia Energy Group
Commission File No: 001-01098
On March 30, 2000, NiSource Inc. and Columbia Energy Group
announced the filing of an application with the Pennsylvania Public
Utility Commission seeking necessary approvals of their planned
merger. The following is a transcript of the joint press release
issued on March 30, 2000:
PRESS RELEASE
MARCH 30, 2000
[NISOURCE LOGO] [COLUMBIA ENERGY GROUP LOGO]
NEWS RELEASE CONTACTS:
MEDIA
NiSource - Sally Anderson (219) 647-6203
Columbia - R.A. Rankin, Jr. (703) 561-6044
INVESTOR RELATIONS
NiSource - Dennis Senchak (219) 647-6085
Columbia - Thomas L. Hughes (703) 561-6001
NISOURCE, COLUMBIA ENERGY GROUP LAUNCH APPROVAL PROCESS
COMPANIES SEEK REGULATORY APPROVAL IN PENNSYLVANIA
MERRILLVILLE, IND. AND HERNDON, VA. (MARCH 30, 2000) - NiSource Inc.
(NYSE: NI) and Columbia Energy Group (NYSE: CG) today announced the
filing of an application with the Pennsylvania Public Utility
Commission seeking necessary approvals of their planned merger.
Pittsburgh-based Columbia Gas of Pennsylvania, Inc., a Columbia
subsidiary, provides retail natural gas service to approximately
389,000 customers in 27 counties.
Pennsylvania is the first state to be asked to approve the merger,
which was announced February 28 and is expected to close by the end of
2000. The combined company will serve more than 4.1 million customers
primarily located in nine states. Its operations will span the high-
growth energy corridor stretching from the Gulf of Mexico to New
England, creating the largest natural gas distributor east of the
Rocky Mountains.
"Today's filing is an important first step in bringing together the
strengths of both companies to provide Pennsylvania consumers the full
benefits of energy choice," said NiSource Chairman, President and
Chief Executive Officer Gary L. Neale. "Already a recognized leader in
opening its markets to supplier choice under deregulation, Columbia
Gas will be able to offer its customers the same friendly, reliable
service plus new energy options being pioneered by NiSource, such as
distributed generation.
"Distributed generation is an alternative means of obtaining electric
power on site using clean-burning, gas-fired generating facilities
ranging from large cogeneration systems for industrial users, to
microturbines for smaller businesses, to compact fuel cells for
homes," Neale explained. "These options add an important local
dimension to the term 'energy independence' for consumers. It's just
one of many ways we're adding value for customers served by our
distribution systems."
Oliver G. Richard III, chairman, president and chief executive officer
of Columbia Energy Group, added, "We believe the merger between
NiSource and Columbia will bring value to our shareholders, customers
and the communities we serve. By virtue of the new company's size,
diversity of products and services, expertise and geographic scope, it
will have the resources and critical mass necessary to compete more
effectively in the rapidly changing energy industry-and to bring value
from that competition to the customers in Pennsylvania."
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NISOURCE/COLUMBIA SEEK PENNSYLVANIA PUC APPROVAL-2
The proposed merger will have no impact on Columbia Gas of
Pennsylvania's rates, terms and conditions now approved by the
Commission, according to the filing. However, customers are expected
to benefit from the increased electric competition from natural-gas-
fueled distributed generation, as well as potential natural gas cost
savings gained through the efficient use of the combined upstream
pipeline and storage assets of the new company.
The filing pointed out that after the merger Columbia Gas of
Pennsylvania will:
* Continue its longstanding civic involvement in the communities it
serves by assuring ongoing charitable donations and civic
involvement consistent with past practices.
* Continue its leading role in promoting competition and customer
choice in rapidly deregulating markets.
* Honor all collective bargaining agreements and provide employees
with the better of Columbia or NiSource aggregate benefits for
three years following the closing. Since NiSource and Columbia
have no overlapping service areas, no significant staff
reductions are expected to take place at the local distribution
company.
* Maintain Columbia Gas of Pennsylvania headquarters in Pittsburgh.
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The daily operational impact of the merger will be transparent to
Columbia Gas customers because the change in corporate ownership "will
not change the manner in which Columbia provides gas sales and
distribution service within the Commonwealth," the filing concluded.
NiSource and Columbia also will seek merger approval from state
regulators in Virginia and Kentucky. Approvals will be sought from
various federal agencies.
NiSource Inc. 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, based in Herndon, Va., is one of the nation's
leading energy services companies, with assets of approximately $7
billion. Its operating companies engage in virtually all phases of
the natural gas business, including exploration and production,
transmission, storage and distribution, as well as retail energy
marketing, propane and petroleum product sales, and electric power
generation. More information about Columbia is available on the
Internet at www.columbiaenergygroup.com.
###
This press release contains certain 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 may 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. 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 press 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 this press release. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The companies do not
undertake any obligation to publicly release any revisions to
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these forward-looking statements to reflect events or
circumstances after the date of this press release.
NiSource and the new holding company will be filing a
registration statement, which will contain a joint proxy
statement/prospectus of NiSource and Columbia Energy, and other
documents with the Securities and Exchange Commission. Investors
and security holders are urged to read the joint proxy statement/
prospectus and any other relevant documents filed with the SEC
when they become available because they will contain important
information. Investors and security holders will be able to
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 from Columbia Investor Relations at 13880 Dulles Corner
Lane, Herndon, Virginia 20171.
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