Washington Gas Acquisition Bid Strikes Key Deal in Maryland

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Courtesy of washingtongas.com

Canadian energy company AltaGas Ltd.’s proposed $6.4 billion buyout of D.C.-based WGL Holdings Inc., the parent company of Washington Gas, reportedly reached a key arrangement in Maryland to help facilitate the deal.

The two companies signed a settlement agreement Monday with the Maryland Energy Administration, Montgomery and Prince George’s counties and local unions ahead of a review by the state’s Public Service Commission, Washington Business Journal reported.

Under the agreement, Washington Gas will spend $70 million to expand its natural gas service areas and $33 million will be earmarked to create the Maryland Gas Expansion Fund, which will champion economic development, job creation and the expansion of natural gas into other parts of the state, the Journal reported.

Washington Gas was not for sale, according to company officials, but when approached by AltaGas, a proposed merger presented an opportunity for Washington Gas to offer greater power and utility options for its 1.1 million customers throughout the D.C. area.

If the merger is approved, Washington Gas will remain the same stand-alone utility company, explained Brian Edwards, WG director of communications and spokesman. The name will not change, the current executive team will remain intact and approximately 65 new positions will be added. With the AltaGas buyout, Edwards said, “We see the opportunity to become a stronger company by partnering with a complimentary company that has very similar values, beliefs and commitments.”

Once the merger is approved, Washington Gas shareholders will receive $88.25 per share for WGL company stocks, and WG customers can expect a one-time $50 rate credit. None of the costs associated with the buyout will be passed on to the customers, Edwards said.

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