UIL Holdings To Buy Three Natural Gas Companies

UIL Holdings, the parent company of United Illuminating, is to buy three natural gas companies. It’s the utility’s first foray outside of electricity distribution. WNPR’s Harriet Jones reports.

UIL will buy Connecticut Natural Gas and Southern Connecticut Gas, along with the Berkshire Gas Company, a local supplier in Massachusetts. The plan must be approved by regulators, but if everything goes smoothly the deal could close by early next year. CEO James Torgerson described the purchase as transformative, almost doubling the company in size.

“It’s very consistent with our core business which is really regulated energy delivery. And really, the way I look at it, we’re substituting for electricity, natural gas – instead of wires, we’re going to use pipes. And basically it’s a delivery business and a distribution business which we’re very familiar with.”

UIL will pay $885 million to the companies’ current owner, Spanish energy giant Iberdrola, and will also assume $400 million of the companies’ debt. UIL’s share price dropped sharply on the news, ending Tuesday down some 10%, as investors apparently worried about the size of the deal.

For WNPR, I'm Harriet Jones.