Dominion to Acquire Louis Dreyfus Natural Gas
Dominion and Louis Dreyfus Natural Gas Corp. jointly announced that Dominion has agreed to acquire Louis Dreyfus Natural Gas for $2.3 billion in cash, stock and assumed debt. The acquisition will increase Dominion's natural gas reserves by 60 percent and expand its fast-growing energy trading business.
When the purchase is completed, Dominion's E&P unit will own more than 4.6 trillion cubic feet equivalent of proved reserves, an increase of more than 60 percent, and will produce more than 450 billion cubic feet annually, an increase of more than 40 percent. When added to Dominion's existing 22,000-megawatt electric generation portfolio, Dominion will have daily energy production capability of more than 3 trillion Btu's.
Over the next three years, Dominion, already one of the nation's largest traders of gas and electricity, expects the acquisition of Louis Dreyfus Natural Gas to help double its energy trading and sales volumes over 2000 levels. The company expects gas trading volumes to increase from 1.2 trillion to 2.4 trillion cubic feet annually and electricity trading volumes to increase from 136 million megawatt-hours to 265 million megawatt-hours annually.
Under terms of the agreement, unanimously approved by both companies' boards of directors, Dominion will acquire 100 percent of Louis Dreyfus Natural Gas's outstanding shares. Each Louis Dreyfus Natural Gas shareholder will receive $20.00 in cash and a fixed exchange ratio of 0.3226 shares of Dominion common stock for each share of Louis Dreyfus Natural Gas common stock. Dominion will issue to Louis Dreyfus Natural Gas shareholders approximately 14.4 million shares, valued at approximately $900 million based on a closing price of $62.63 on September 7, 2001, and $890 million in cash. Dominion will assume about $505 million in Louis Dreyfus Natural Gas debt.