EXHIBIT 99.1
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FOR ADDITIONAL INFORMATION
INVESTOR RELATIONS: MEDIA:
Dennis Senchak (219) 647-6085 Sally Anderson (219) 647-6203
Rae Kozlowski (219) 647-6083
NISOURCE SHAREHOLDERS APPROVE MERGER WITH COLUMBIA ENERGY GROUP
NEALE OUTLINES STRATEGY FOR NATION'S LARGEST GAS DISTRIBUTOR
EAST OF ROCKIES
COLUMBUS, Ohio (June 1, 2000)-NiSource Inc. (NYSE: NI)
shareholders today overwhelmingly approved the company's proposed
merger with Columbia Energy Group (NYSE: CG) to create a super-
regional energy powerhouse stretching from Chicago in the west and the
Gulf of Mexico in the south to New England. Columbia shareholders
will vote on the transaction at a special meeting on June 2.
"Today's vote demonstrates growing investor confidence in our
plan to transform NiSource from a solid regional player into the
premier competitor as the nation's largest natural gas distribution
company east of the Rockies," Gary L. Neale, NiSource chairman,
president and chief executive officer, told shareholders. "Our merger
with Columbia Energy Group creates a powerful platform for growing
shareholder value, accessing 30 percent of the nation's population and
40 per cent of U.S. energy demand."
In his remarks to shareholders, Neale detailed progress on
completion of the merger and described NiSource's strategy for the
future.
"We remain on track for completing the transaction before year-
end given the remaining state and federal regulatory approvals," he
said. All necessary state filings have been made, as well as those
required by the Federal Energy Regulatory Commission and the
Securities and Exchange Commission. A filing with the U.S. Department
of Justice under the Hart-Scott-Rodino Act is scheduled for next week.
"Our strategy is to create a new energy future based on building
the right assets in the right markets," Neale explained. "Our merger
creates a broad platform to maximize opportunities for growth centered
on our distribution businesses. We will be serving 4.1 million
customers, including 3.2 million gas distribution customers in nine
states. We will also have pipeline operations in 16 states and one of
the nation's largest gas storage systems at 700 billion cubic feet of
capacity."
"The right assets, including upstream access to gas supply and
storage, will allow NiSource to provide new options to gas markets
that are projected to grow some 60 percent to 35 trillion cubic feet
of gas demand by 2020. Nearly half of that demand growth will be
located in the energy corridor from the Gulf of Mexico to New England,
and will be driven by new technologies we are pioneering, such as
distributed generation," he added.
"New technologies like microturbines and fuel cells allow
customers to generate their own power on-site, in conjunction with or
in place of the traditional electric supply grid. This creates new
dimensions of energy independence and choice for all consumers served
by NiSource distribution companies, from residential to industrial."
Neale said, "NiSource assets will also be well positioned to help
supply the fuel for some 17,500 megawatts of new gas-fired electric
utility generation proposed for Midwest and East Coast markets."
Neale pointed out that the $6.1 billion merger, announced Feb.
28, will be financed through approximately $3.1 billion in debt, $1
billion in non-core asset sales from both organizations, and nearly $2
billion in common equity and SAILS[SM]. Columbia shareholder interest
in receiving NiSource stock has resulted in an increase in the
projected common equity portion of the purchase from 23 percent to the
maximum of 30 percent, reducing the amount of debt financing required.
The combined company also expects to realize synergies ranging
from $98 million in 2001 to $185 million in 2005, primarily by
implementing shared services for corporate functions and implementing
best practices across the organization.
Approximately 65 percent of NiSource outstanding shares were
voted in approval of the merger agreement, representing approximately
80 percent of the shares voted.
In other business, NiSource shareholders re-elected Neale and two
outside directors to board terms expiring in 2003: Arthur J. Decio,
chairman of the board of Skyline Corporation, Elkhart, Ind.; and
Robert J. Welsh, chairman and chief executive officer of Welsh, Inc.,
Merrillville, Ind. Shareholders also approved the Amended and
Restated 1994 Long Term Incentive Plan.
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 form 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 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 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 company's 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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