8-KOther Events

AMEREN CORP 8-K Report (Apr 29, 2002)

Filed April 29, 2002For Securities:AEE

Summary

Ameren Corporation announced on April 29, 2002, a definitive agreement to acquire CILCORP Inc., the parent company of Central Illinois Light Company (CILCO), from The AES Corporation for $1.4 billion. This strategic acquisition is designed to enhance Ameren's core energy growth strategy by integrating CILCORP's natural gas and electric businesses, including 1,200 megawatts of generating capacity. The transaction is expected to be immediately accretive to earnings and drive long-term growth for Ameren. The acquisition will significantly expand Ameren's customer base in Illinois, making it the state's second-largest electric utility. Ameren emphasizes a commitment to maintaining CILCO's operations in Peoria, honoring existing labor contracts, and keeping electric rates frozen until at least 2004. The company also plans to increase civic contributions and introduce Ameren's community support programs to CILCORP's service territory, underscoring a focus on customer service and community engagement.

Key Highlights

  • 1Ameren to acquire CILCORP Inc. (parent of CILCO) for $1.4 billion.
  • 2Acquisition includes CILCORP's natural gas and electric businesses and 1,200 MW of generating capacity.
  • 3Transaction is expected to be immediately accretive to earnings and drive long-term growth.
  • 4Ameren will become Illinois' second-largest electric utility post-acquisition.
  • 5Electric rates for CILCO customers to remain frozen until at least 2004.
  • 6Ameren commits to maintaining CILCO's operations in Peoria and honoring labor contracts.
  • 7Regulatory approvals from ICC, SEC, FERC, and HSR Act are required.

Frequently Asked Questions

Ameren is acquiring CILCORP for $1.4 billion. The strategic rationale is that CILCORP's operations are a natural fit within Ameren's existing service territory and market, complementing Ameren's Illinois operations with base-load generation assets, a strong customer base, and low-cost operations. Ameren anticipates the acquisition will be immediately accretive to earnings and drive strong long-term growth.

The acquisition includes CILCORP's natural gas and electric businesses, its parent company stock, and certain other assets. This encompasses CILCO's approximately 200,000 electric and 200,000 natural gas customers, along with 1,200 megawatts of largely coal-fired generating capacity. It also includes AES-Medina Valley Cogen, LLC, a 40 MW gas-fired generation plant.

For customers, electric rates are planned to remain frozen at current levels at least until 2004, and existing generation and energy services contracts with nonresidential customers will remain in force. For employees, Ameren expects very limited staff reductions, primarily through attrition, and commits to honoring existing labor contracts. The headquarters and operational functions are expected to remain in Peoria.

The acquisition is subject to several regulatory approvals, including the Illinois Commerce Commission (ICC), the Securities and Exchange Commission (SEC), the Federal Energy Regulatory Commission (FERC), and the expiration of the waiting period under the Hart-Scott-Rodino Act. Shareholder approval is not required for either company.