Ameren announced on Feb. 3 the proposed $2.3 billion transaction, which includes Dynegy's 20 percent interest in Electric Energy, Inc., owner of a Joppa, Ill., coal-fired power plant, and a firm capacity power supply contract for the annual purchase by IP of 2,800 megawatts of electricity from Dynegy. That power supply contract extends through 2006 and is expected to supply about 75 percent of IP electric customer requirements. Ameren is seeking expedited approval of the acquisition from the SEC.
The transaction is subject to approval by the SEC under the Public Utility Holding Company Act. A law enacted in 1935, this act prohibits the acquisition of any electric or gas utility company through a holding company unless that business forms part of an integrated public utility system when combined with the utility's other electric business.
Also, on March 30, Ameren filed required notices with the federal antitrust authorities to acquire IP. Pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), those filings fulfill the companies' statutory obligation to notify the antitrust authorities of a transaction of this economic size so that the transaction can be reviewed for its possible competitive effects. The HSR Act provides for an initial 30-calendar-day waiting period following the filing with the Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ"). During this period, the agencies will review the filing and may grant early termination of the waiting period or allow the waiting period to expire at the end of the initial waiting period. Either action allows the parties to conclude the transaction as soon as all other conditions are satisfied.
The HSR Act further provides that if, within the initial waiting period, the FTC or DOJ issues a request for additional information or documents, the waiting period during which the companies cannot conclude the transaction will be extended until 11:59 p.m. on the 30th day after the date of substantial compliance by the filing parties with that request.
On March 29, Ameren filed with the Federal Communications Commission; on March 24, the company filed with the Illinois Commerce Commission and on March 25, the company filed an application with the Federal Energy Regulatory Commission to acquire IP. No approval is required from shareholders of either company. The company expects regulatory approvals to be completed by year-end 2004.
With assets of $14.3 billion, Ameren serves 1.7 million electric customers and 500,000 natural gas customers in a 49,000-square-mile area of Missouri and Illinois. Illinois Power, based in Decatur, Ill., serves 600,000 electric and 415,000 natural gas customers in a 15,000 square-mile territory across Illinois. The company was founded more than 75 years ago and its parent company\- Illinova--was purchased in 2000 by Houston, Texas-based Dynegy Inc.
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