Montana Power Selling Energy Unit
BUTTE, Mont. (AP) _ Montana Power Co. will sell its energy distribution business to NorthWestern Corp. for $612 million in cash.
The combined electric distribution and transmission system under the deal announced Monday will consist of more than 20,000 miles of electric lines and over 5,000 miles of natural gas pipelines.
With the acquisition, NorthWestern will distribute natural gas and electricity to more than 575,000 customers in Montana, South Dakota, and Nebraska.
NorthWestern is also assuming $488 million in Montana Power debt as part of the deal, boosting its total value to $1.1 billion.
The transaction is expected to close during the first half of 2001.
Bob Gannon, Montana Power’s chairman and chief executive, said the agreement brings together two companies with decades of experience in serving the needs of energy customers in the northern tier states.
He said the cash from the sale will be reinvested in Touch America, Montana Power’s telecommunications subsidiary. ``This is our future and focus,″ he said.
By the end of 2000, Touch America expects to have a fiber-optic and wireless network of 18,000 miles. The company projects 26,000 miles by the end of 2001.
Montana Power now has agreements to sell not only its utility business, but also its nonregulated businesses in oil and natural gas, coal and independent power production, Gannon noted.
``Joining with another dynamic company in our region positions us for greater success in the new energy marketplace,″ said Merle D. Lewis, chairman and chief executive of NorthWestern, which is based in Sioux Falls, S.D.
In morning trading on the New York Stock Exchange, Montana Power shares were up 29.7 cents to $33.688 while NorthWest shares were down 6.25 cents to $19.438.
On the Net:
NorthWestern site: http://www.northwestern.com
Montana Power site: http://www.mtpower.com