NU and NSTAR closed their merger and executives will hold a press conference at 2 p.m. but a spokesman told The Mines job reductions are coming, but will come through attrition and not layoffs.
“There will be no mass layoffs, and the merger is not expected to affect our operating companies,” said Al Lara, an NU spokesman. “With mergers come some staffing duplications, particularly at the parent company level. Any reductions resulting from our integration is expected to be be accomplished in time through normal attrition (that is, the normal pace of retirements and people leaving the company for new jobs).”
And here’s the official announcement from the companies.
Northeast Utilities and NSTAR announced today that their merger is complete, creating one of the nation’s largest utilities with six regulated electric and natural gas utilities serving 3.5 million customers in three states. The newly merged company will continue to be called Northeast Utilities and NSTAR will become an NU subsidiary in Massachusetts. NU will be more diverse and better positioned to support economic growth and renewable energy opportunities in New England.
Upon the closing of the merger, Thomas J. May became president and CEO of Northeast Utilities, and Charles W. Shivery became non-executive chairman of NU’s board of trustees. The combined company will have dual headquarters in Boston and Hartford.
“Today our two great companies become one. This merger puts us in a unique position to provide better service levels, support our communities and employees, and take the lead on green programs and smart technologies that protect the environment,” said May. “This is an exciting time in the energy industry and together we have the scale, talent and financial resources to meet the complex and demanding energy needs of our customers across New England.”
Also effective today, the NU board of trustees now consists of 14 members including seven designees of NU and seven designees of NSTAR. The NU trustees who will continue to serve on the board are Mr. Richard H. Booth, Mr. John S. Clarkeson, Ms. Cotton M. Cleveland, Mr. Sanford Cloud, Jr., Mr. Kenneth R. Leibler, Mr. Charles W. Shivery and Mr. Dennis R. Wraase. The new NU trustees designated by NSTAR are Mr. James S. DiStasio, Mr. Francis A. Doyle, Mr. Charles K. Gifford, Mr. Paul A. LaCamera, Mr. Thomas J. May, Mr. William C. Van Faasen and Ms. Frederica M. Williams.
With a deep commitment to building on the shared companies’ history of delivering great service to New Englanders, NU has plans to make significant investments in energy infrastructure over the next five years. In addition, customers will share in the estimated $780 million merger savings produced over the next ten years. These important long-term savings will come as a result of efficiencies achieved over time, primarily through process improvements, consolidation of systems and drawing on best practices from both companies. Customers can expect to interact with their individual utility as they always have, with the same names, addresses and websites they currently utilize. (Bold was done by Financial Mines for emphasis)
“As a stronger company, we are better positioned with the resources necessary to deliver outstanding reliability and service,” said May. “Our customers will not only share in the financial savings our combined company will achieve, they will also benefit from significant investments in upgrades to our infrastructure.”
As a result of merger-related settlements in Massachusetts and Connecticut, NU has guaranteed benefits for customers that include rate credits, rate freezes and continued civic engagement. The company also pledges further environmental commitments to renewable energy, energy efficiency and electric vehicle development.
One of New England’s largest, local employers
As a locally controlled energy company, the newly merged company creates a strong platform for job stability and career opportunities for its 9,000 employees. The merger provides greater resources for storm restoration, as well as for infrastructure improvements and safe and reliable electric service.
“We are keenly aware of the crucial role our employees will continue to play in the success of our company,” May added. “We have a dedicated team of talented, hard-working men and women that is up to the task of building upon our strengths and tackling the future challenges of our rapidly evolving industry.”
NU will continue to support the communities it serves and will maintain funding for vital civic and philanthropic organizations across its combined service areas.
In accordance with the merger agreement, NSTAR shareholders will receive 1.312 Common Shares of NU for each Common Share of NSTAR previously held. Northeast Utilities, with a post-close market capitalization of about $12 billion, will operate four electric distribution and transmission companies, as well as two gas distribution companies in Massachusetts, Connecticut and New Hampshire. On a pro-forma basis, the combined company would have annual operating revenues of $7.4 billion, based on results for the 12 months ended December 31, 2011. Per the merger agreement, effective for its second quarter dividend payment, NU is expected to increase its current quarterly dividend from $0.29375 to approximately $0.3425 per common share.