UGI’s GASMARK to buy TXU Energy’s Northeast gas marketing business

VALLEY FORGE, Pa., March 13, 2003 — UGI Corp. has announced that its energy marketing subsidiary, UGI Energy Services, Inc., has agreed to acquire the gas marketing business of TXU Energy serving the northeast region of the United States.

TXU Energy is a subsidiary of TXU Corp (NYSE: TXU – News), a major gas and electric utility in Texas with energy operations in North America and Australia. Terms of the transaction were not disclosed.

UGI Energy Services, which does business as GASMARK® and POWERMARK®, will assume the existing sales and supply agreements for approximately 1,000 commercial and industrial customers located primarily in New York, Pennsylvania, Ohio, and New Jersey. Virtually all of the TXU Energy employees associated with serving these customer accounts will join UGI Energy Services.

As a result of this transaction, UGI Energy Services will serve over 5,000 commercial and industrial customers on 31 natural gas utility systems in Pennsylvania, New York, Ohio, New Jersey, Maryland, Virginia and Delaware. The acquisition is expected to increase GASMARK® sales volume by over 60% to approximately 140 billion cubic feet, making it one of the region’s largest energy marketing companies.

Lon R. Greenberg, chairman, president and chief executive officer of UGI, said, “This transaction is our largest energy marketing acquisition to date. It not only improves customer density in our common marketing areas, but it expands our footprint in the Mid-Atlantic region. Both companies have a reputation for high levels of customer service and are committed to a smooth transition for the TXU Energy customers. We welcome the addition of the high quality employees that built the TXU Energy business into the regional player that it is today.”

The transaction follows similar but smaller acquisitions by UGI over the past three years that included all or portions of the energy marketing businesses of Columbia Energy, Conectiv, and PG Energy in the same region. “We have focused our energy marketing business on commercial and industrial natural gas customers in regions that permit us to capitalize on our existing network of assets and intellectual capital,” concluded Greenberg. Results of the TXU Energy acquisition are expected to be modestly accretive to earnings in the first full year of operation.

Gas Marketing Business

TXU Energy recently announced that it is focusing on its core operations in Texas and Australia where it provides electric and gas service to five million customers, including 1.4 million regulated gas customers in Texas.

UGI’s ongoing objective is to grow earnings six to ten percent per year, increase the dividend three percent per year, grow its domestic AmeriGas Propane and utility operations and invest in related and complementary businesses. Since 1999, UGI has improved earnings significantly, increased the dividend four times, and invested significantly in its core businesses. In addition, the company has continued to invest in its regional gas marketing and heating and cooling service businesses as well as coal-fired electric generation and international propane distribution.

UGI is a holding company with propane marketing, utility and energy marketing subsidiaries. Through subsidiaries, UGI owns 51 percent of AmeriGas Partners, L. P. (NYSE:APU – News), the nation’s largest retail propane marketer.

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