Primergy Merger
On May 3, 1995, Wisconsin Energy Corporation and Northern States Power Company (NYSE: NSP) each filed a Securities and Exchange Commission Form 8-K to combine in a merger-of-equals transaction to form Primergy Corporation, which would have been a registered public utility holding company and new parent of both NSP and of the WEC operating subsidiaries. It would have been the 10th largest investor-owned electric and gas utility company in the United States, based on market capitalization at that time of about US$6.0 billion. NSP would have been the nominal survivor and the merged company would be headquartered in Minneapolis (headquarters of the old MSP), but the merged company would have been registered in Wisconsin.
Wisconsin Energy's utility subsidiaries, Wisconsin Electric Power Company (WEPCO) and Wisconsin Natural Gas Company (WNG), were to be consolidated under a new subsidiary name, Wisconsin Energy Company, headquartered in Milwaukee. Under that name, it and NSP (headquartered in Minneapolis) would have continued to operate as the two principal subsidiaries of Primergy Corp. Also, NSP-Wisconsin would merge into the operating subsidiary Wisconsin Energy Company. NSP's two subsidiaries were NSP-Minnesota, operating in Minnesota, North Dakota and South Dakota, and NSP-Wisconsin, operating in Wisconsin and the Upper Peninsula of Michigan.The merger deal was expected to be completed in the fourth quarter of 1996.
On May 16, 1997, both CEOs announced that the boards of directors of both companies had terminated the merger plan because of approval delays by commissions in Minnesota and Wisconsin, Securities & Exchange Commission and U.S. Department of Justice. They also stated that regulatory agencies were changing their merger policies as they were considering the companies' filing and that further delay would reduce the benefits of the Primergy transaction.
The delay already had put the merger five months behind schedule and had reduced earnings for both utilities by a total of US$58 million to that point. In addition, Wisconsin Energy's stock had fallen about 13% since early 1995 when the deal had been announced, while NSP's stock had risen by 6%. The case was considered to be a bellwether in the utilities industry, putting an end to the rapid pace of mergers and acquisitions that had been ongoing up to then.
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