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A Merger of Equals
While I read with interest and appreciated your story on electric and natural gas convergence ("Electric/Gas Convergence, Meter to Meter," May 1, 1997, p. 26), I must bring to your attention a misinterpretation concerning the proposed merger of Pacific Enterprises and Enova Corp.
In the second paragraph of your story, you said that Enova "is set to acquire Southern California Gas Co. through a merger with the gas utility's parent company, Pacific Enterprises."
At best, this is an unclear description of this transaction, leaving the reader to wonder whether this is an acquisition of one company by another, or if it is a friendly merger of two energy companies. At worst, it leaves the misinterpretation that Pacific Enterprises is being acquired by Enova. This is simply not the case.
From our first announcement in October 1996, we have called this a merger of equals. Both the trade and general news media have correctly reported this transaction as a merger. This is a merger of equals for several reasons, including: a stock exchange ratio that is consistent with a merger-of-equals transaction; a balance in headquarters locations of the new company and its entities between Los Angeles and San Diego; and nearly equal ownership of the company between Pacific Enterprises and Enova shareholders.
Also, you should know that while the two parent companies are merging, the two utility companies - SoCalGas and SDG&E - will remain headquartered in their respective service territories, where they will continue to operate as separate companies. L.A.-based Energy Pacific, a joint venture of Pacific Enterprises and Enova, will offer unregulated gas and electric services in California, throughout the Southwest and in various national markets as they become competitive through energy restructuring.
George I. Minter, Director
Corporate Communications
Pacific Enterprises
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