Dear Retiree:
I’m very pleased to announce that our board of directors, along with AGL Resources’ board of directors, has approved a definitive merger agreement in which AGL Resources will become a wholly-owned subsidiary of Southern Company.
This is an exciting opportunity for Southern Company.
When completed, the combination will better position the companies to provide natural gas infrastructure to meet customers’ growing energy needs, and will create the second-largest utility company in the U.S. by customer base with:
- Eleven regulated electric and gas distribution companies in 9 states providing service to approximately nine million customers, as well as retail operations across America;
- Operations of nearly 200,000 miles of electric transmission and distribution lines and more than 80,000 miles of gas pipelines; and
- Generating capacity of approximately 46,000 megawatts.
As America’s leader in developing the full portfolio of energy resources, we believe the addition of AGL Resources to our business will better position Southern Company to play offense in supporting America’s energy future through additional natural gas infrastructure. For some time we have expressed our desire to explore opportunities to participate in natural gas infrastructure development. With AGL Resources’ experienced team operating premier natural gas utilities and their investments in several major infrastructure projects, this is a natural fit for both companies.
For investors, this transaction will create a unique platform that is well-positioned to compete for growth across the energy value chain. For customers it will strengthen reliability and improve current and future energy infrastructure development. And for communities, it will provide for the expansion of our companies’ customer-focused business models.
For Southern Company, this transaction is anticipated to:
- Be accretive to earnings per share (EPS) in the first full year following the close of the transaction;
- Accelerate expected long-term EPS growth to 4-5 percent;
- Preserve its strong financial profile and further support investment in the company’s diversified energy platform; and
- Enhance the ability to increase the growth rate of its dividend, subject to board of directors’ approval.
If you are not familiar with AGL Resources, they have a rich history much like Southern Company, having delivered safe, efficient, reliable natural gas to customers for more than 150 years. Its business segments include seven natural gas utilities, retail operations to market natural gas and home services, wholesale services and midstream operations.
At closing, AGL Resources will become the sixth operating subsidiary of Southern Company. Similar to each of our existing operating subsidiaries, AGL Resources will continue to maintain its own management team and board of directors. A large part of the value associated with AGL Resources is the depth and quality of their management team. But, until the transaction is complete, both companies will continue to operate separately and it will remain business as usual at Southern Company.
Completion of the transaction is conditioned upon, among other things, the approval of the AGL Resources’ shareholders and certain state utility and other regulatory commissions.
The transaction is also subject to the notification and clearance and reporting requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Today is an outstanding day for us and for AGL Resources. For more than a century we have been the best in the business to deliver clean, safe, reliable and affordable energy to our customers. We have made our communities better off because we have remained committed to developing a healthy economy and environment for all we are privileged to serve. With the addition of AGL Resources to our team, Southern Company is well-positioned for continued success, behind the strength of each of our employees and you, our valued retiree. It was your amazing work that built this company into the premier energy company in America, and that foundation is what will continue to make us successful for decades to come.
Sincerely,
Thomas A. Fanning
Chairman, President and CEO
Southern Company