FirstEnergy to merge Allegheny Energy in stock transaction

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Akron, Ohio, February 11, 2010 – FirstEnergy and Allegheny Energy announced that both companies’ boards of directors have unanimously agreed to merge in a stock-for-stock transaction.

Under the terms of the agreement, Allegheny shareholders would receive 0.667 shares of FirstEnergy common stock in exchange for each share of Allegheny they own.

Based on the closing stock prices for both companies on February 10, 2010, Allegheny shareholders would receive a value of $27.65 per share, or $4.7 billion in the aggregate.

FirstEnergy will also assume about $3.8 billion in Allegheny net debt.

Following the completion of the merger, FirstEnergy shareholders would own about 73 percent and Allegheny shareholders would own about 27 percent of the combined company.

The transaction is anticipated to be accretive to FirstEnergy earnings in the first year following the close. The companies expect to complete the transaction within 12-14 months.

The combination creates a leading regional energy provider with:

    * About $16 billion in annual revenues and $1.4 billion in annual net income (combined figures as of December 31, 2009);

    * Ten regulated electric distribution companies providing electric service to more than six million customers in Pennsylvania, Ohio, Maryland, New Jersey, New York, Virginia and West Virginia;

    * Nearly 20,000 miles of high-voltage transmission lines connecting the Midwest and Mid-Atlantic;

    * About 24,000 MW of generating capacity from a diversified mix of regional coal, nuclear, natural gas, oil and renewable power; and

    * More than 2,200 MW of renewable energy, including hydroelectric, contracted wind and pumped-storage capacity.

Following completion of the merger, the combined company would retain the FirstEnergy name and be headquartered in Akron, Ohio.

The company’s customers will continue to be served by their current electric utility companies including: Pennsylvania Electric Company (Penelec); Pennsylvania Power Company (Penn Power); Metropolitan Edison Company (Met-Ed); Allegheny Power (including: West Penn Power Company; Monongahela Power Company; The Potomac Edison Company); Ohio Edison Company; The Cleveland Electric Illuminating Company (CEI); The Toledo Edison Company; and Jersey Central Power & Light (JCP&L).

 

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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