TULSA, Okla., and LAS VEGAS, Dec. 14 /PRNewswire/ -- ONEOK, Inc.,
(NYSE: OKE) and Southwest Gas Corporation (NYSE: SWX) today announced that
their boards of directors have unanimously approved a definitive merger
agreement. ONEOK will pay $28.50 per share of Southwest Gas common stock
outstanding, valuing Southwest Gas at approximately $1.8 billion, including
assumed debt. The transaction is expected to be accretive in the first full
year of operations.
The merger will create the largest stand-alone gas distribution company in
the United States serving 2.6 million customers in five states with over 160
years of combined experience in the natural gas distribution business.
ONEOK's acquisition of Southwest Gas combines the financial strength of ONEOK
with the country's fastest growing gas distribution utility. ONEOK will be
the primary gas distribution company in Arizona, Kansas, Nevada and Oklahoma
and will also have a strong presence in the state of California.
Larry Brummett, chairman and chief executive officer of ONEOK, said, "We
are excited about the opportunities this merger provides for the employees and
customers of ONEOK and Southwest Gas. ONEOK has demonstrated its ability to
profitably merge gas distribution operations, while enhancing service to
customers and opportunities for employees. We are confident this merger will
create value for our shareholders through increased earnings growth in a
deregulating energy marketplace."
Brummett added, "Southwest Gas has a talented employee base with skills
that are very complementary to ONEOK's. We believe the expertise of ONEOK as
a fully integrated gas distribution company with gas production, marketing and
processing will create new opportunities at Southwest Gas. Southwest Gas
serves two of the fastest-growing states in the country -- Arizona and Nevada
-- and we look forward to profitably developing this growth with our new
Michael Maffie, president and chief executive officer of Southwest Gas
said, "The new company will be solid financially with strong cash flow to
enhance growth opportunities in the rapidly expanding Southwest Gas service
territories and will minimize regulated business risks with the diversified
geographic exposure of five states."
The terms of the transaction call for three Southwest Gas board members to
join ONEOK's board filling a current vacancy and two positions that will be
vacated due to retirements in 1999. Southwest Gas will operate as a division
of ONEOK, Inc. and will retain its name in the local markets it serves. Larry
Brummett said, "The merger is not expected to result in employee lay-offs and
we would expect future employee adjustments to be the result of attrition
and/or voluntary separation."
Brummett added, this transaction enhances ONEOK's position as a strong
regional energy company and affirms our belief in the dynamic growth potential
of the natural gas industry.
The transaction is subject to customary conditions, including approvals
from Southwest Gas shareholders, state regulators in Arizona, California and
Nevada, and the Federal Energy Regulatory Commission. The merger is expected
to be accounted for using the purchase method, and the transaction is expected
to close during the fall of 1999.
Southwest Gas Corporation provides natural gas to approximately 1.2
million customers in Arizona, Nevada and California. Its service territories
are centered in the fastest-growing region of the country.
ONEOK, Inc., is engaged in natural gas intrastate distribution and
transmission, gas processing, gas marketing and gas production. ONEOK has
approximately 31.6 million shares of common stock.
Statements contained in this release that include company expectations or
predictions of the future are forward-looking statements intended to be
covered by the safe harbor provisions of the Securities Act of 1933 and the
Securities Exchange Act of 1934. It is important to note that the actual
results of company earnings could differ materially from those projected in
such forward-looking statements. Information is available on the Internet
World Wide Web at http://www.oneok.com.
SOURCE ONEOK, Inc.; Southwest Gas Corporation
Web site: http: //www.oneok.com
Company News On-Call: http: //www.prnewswire.com/comp/804969.html or fax, 800-758-5804, ext. 804969
CONTACT: Media: Roger Buehrer, Las Vegas, NV, 702-876-7132, Shareholders: Laura Hobbs, Las Vegas, NV, 702-876-7237, both of Southwest Gas Corporation; or Media/Shareholders: Weldon Watson of ONEOK, Inc., Tulsa, OK, 918-588-7158