Ameren reaches agreement to purchase CILCORP

ST. LOUIS, April 29, 2002 — Ameren Corp. Monday announced the signing of a definitive agreement for the purchase of CILCORP, Inc., from The AES Corp. CILCORP is the parent company of Peoria-based Central Illinois Light Co. (CILCO).

In a transaction valued at $1.4 billion, Ameren will assume CILCORP debt at closing and pay the balance in cash to purchase the common stock of CILCORP, along with certain other assets. The purchase includes CILCORP’s natural gas and electric businesses, including 1,200 megawatts of largely coal-fired generating capacity.

Immediately following the announcement, Moody’s Investors Service placed the debt ratings of Ameren under review for possible downgrade.

Upon completion of the acquisition, expected within 12 months, CILCO would become an Ameren subsidiary, but would remain a separate utility company, known as AmerenCILCO.

With this acquisition, Ameren will rank as Illinois’ second largest electric utility based on the number of customers, total assets and operating revenues.

“This acquisition is a natural fit with our core energy growth strategy,” says Charles W. Mueller, chairman and chief executive officer, Ameren Corporation. “CILCORP’s operations are in a service territory and market where we already operate very effectively. In addition, CILCORP’s base-load generation assets, strong customer base, and low-cost operations complement Ameren’s existing Illinois operations extremely well. Synergies from the acquisition will make this transaction immediately accretive to earnings and will drive strong long-term growth for our company.”

“This acquisition brings impressive benefits to customers and communities in Illinois,” says Gary L. Rainwater, president and chief operating officer of Ameren Corporation. “We will expand our commitment of bringing high-quality, reliable electric and natural gas services to CILCORP’s approximately 200,000 electric and 200,000 gas customers. We take this commitment seriously, as evidenced by our top ratings on customer service in a recent Illinois Commerce Commission survey.”

The transaction was unanimously approved by both companies’ boards of directors, but is subject to the approval of the Illinois Commerce Commission, the Securities and Exchange Commission, the Federal Energy Regulatory Commission and the expiration of the waiting period under the Hart-Scott- Rodino Act. No approval is required from shareholders of either company.

— The headquarters of AmerenCILCO will remain in Peoria, where Ameren anticipates maintaining the existing operations center, customer call center, business-to-business and retail marketing groups, plus other support functions.

— The transaction also includes AES-Medina Valley Cogen, LLC — a 40- megawatt, gas-fired electric generation plant. The plant produces electricity, steam and chilled water, which is sold to CILCO. CILCO resells plant output to Caterpillar — CILCO’s largest industrial customer.

— Electric rates will remain frozen at current levels at least until 2004, and existing generation and energy services contracts with nonresidential customers will remain in force.

— With the addition of CILCO, Ameren expects to make very limited staff reductions at Ameren-wide, and those reductions would be made primarily through attrition. Existing labor contracts will be honored.

— Ameren plans to increase CILCO’s annual civic, charitable and social service contribution levels to at least $1 million to be used in the Peoria area and other locations now served by CILCO. That level will allow for continued support of such activities and for the expansion of three Ameren programs into the former CILCO service territory. They are:
– Dollar More, a low-income energy assistance program,
– Power Player, a program to support youth sports teams, and
– SmartLights, providing installation of energy-efficient lighting in public areas.

— Ameren plans to commit additional funds annually in continued support for economic development organizations and to support special marketing programs aimed at attracting new jobs to the Peoria area.

“Together, Ameren and CILCORP will continue a heritage of providing strong support to hundreds of Illinois communities with a combined customer base of nearly 600,000 electric and nearly 400,000 natural gas customers in Illinois,” added Rainwater.

Ameren was advised on this transaction by Goldman, Sachs & Co.

AMEREN CORPORATION: A $10-billion-asset company based in St. Louis, Mo., Ameren Corporation provides energy services to 1.5 million electric and 300,000 natural gas customers over 44,500 square miles in Illinois and Missouri.

CILCORP: With $1.8 billion in assets and 2001 revenues of $815 million, CILCORP, formed in 1985 and headquartered in Peoria, IL, is an energy services company. CILCORP’s largest subsidiary, CILCO, serves 200,000 electric and more than 200,000 natural gas customers, and includes a regulated electric and natural gas delivery unit, power generation facilities, and a retail energy business.

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