NiSource To Split Into Two Publicly Traded Companies - Update

(RTTNews) - Energy holding company NiSource Inc (NI) said Sunday its board has approved in principle, plans to separate its natural gas pipeline and related businesses into a stand-alone publicly traded company.

The transaction will result in two focused energy infrastructure companies: NiSource Inc, a fully regulated natural gas and electric utilities company; and Columbia Pipeline Group Inc ("CPG"), a pure-play natural gas pipeline, midstream and storage company.

The separation is expected to occur in mid-2015.

"Separating our regulated utilities and pipeline businesses is a significant and logical step in our proven long-term strategy that has delivered substantial value to investors and enhanced service for our customers," NiSource CEO Robert Skaggs Jr. said.

Skaggs said as independent entities, both companies will benefit from the size and scale of their distinct assets and customer bases, and will have enhanced strategic clarity and focus.

Under the separation plan, NiSource shareholders would retain their current shares of NiSource stock and receive a pro-rata dividend of shares of CPG stock in a transaction that is expected to be tax-free to NiSource and its shareholders.

The actual number of CPG shares that would be distributed to NiSource shareholders will be determined prior to closing, which is expected to take place in mid-2015.

CPG, which is expected to be listed on the New York Stock Exchange under the ticker symbol "COLP", and will operate more than 15,000 miles of natural gas transmission pipelines, nearly 300 billion cubic feet of underground natural gas storage capacity, and a growing portfolio of midstream and related facilities.

The CPG system provides access to energy markets from the U.S. Southeast through the Northeast, as well as strategic asset positions throughout the Marcellus and Utica Shale production regions. The company has leveraged the assets toward projects, many of which are in advanced stages of development. These projects represent a potential capital investment opportunity of up to $15 billion over the next 10 years.

Upon completion of the planned separation, NiSource will remain one of the largest natural gas utility companies in the United States, serving more than 3.4 million customers. The company will continue to be listed on the New York Stock Exchange under the ticker symbol "NI".

As part of the transition process, the NiSource board plans to formally name CEOs for both publicly traded companies by the end of 2014.

NiSource does not expect the separation to result in job reductions among its current workforce of about 8,800 employees.

NiSource will continue to be headquartered in Merrillville, Indiana, and CPG will be headquartered in Houston, Texas.

NI closed Friday at $38.58, down $0.07 or 0.18%, on a volume of 2.7 million shares on the NYSE.