FirstEnergy to acquire Allegheny Energy in $8.5 billion stock-for-stock deal

    AKRON, Ohio -- FirstEnergy and Allegheny Energy, Inc.  today announced that both companies' boards of directors have unanimously approved a definitive agreement in which the companies would combine in a stock-for-stock transaction.

    Under the terms of the agreement, Allegheny shareholders would receive 0.667 shares of FirstEnergy common stock in exchange for each share of Allegheny they own. Based on the closing stock prices for both companies on Feb. 10, 2010, Allegheny shareholders would receive a value of $27.65 per share, or $4.7 billion. FirstEnergy will also assume approximately $3.8 billion in Allegheny net debt. The price per share represents a premium of 31.6 percent to the closing stock price of Allegheny on Feb. 10, 2010, and a 22.3 percent premium to the average stock price of Allegheny over the last 60 days ending Feb. 10, 2010. Following the completion of the merger, it is anticipated that FirstEnergy shareholders would own approximately 73 percent and Allegheny shareholders would own approximately 27 percent of the combined company.

    The companies expect to complete the transaction within 12-14 months.

    The combination creates a leading regional energy provider with: -- Approximately $16 billion in annual revenues and $1.4 billion in annual net income (combined figures as of December 31, 2009); -- Ten regulated electric distribution companies providing electric service to more than six million customers in Pennsylvania, Ohio, Maryland, New Jersey, New York, Virginia and West Virginia; -- Nearly 20,000 miles of high-voltage transmission lines connecting the Midwest and Mid-Atlantic; -- Approximately 24,000 megawatts (MW) of generating capacity from a diversified mix of regional coal, nuclear, natural gas, oil and renewable power; and -- More than 2,200 MW of renewable energy, including hydroelectric, contracted wind and pumped-storage capacity. 

    "The combination of our companies is a natural fit that will accelerate our efforts to strengthen the operating performance of our generating fleet while building on our long-standing dedication to customers, shareholders and employees," said Anthony J. Alexander, president and chief executive officer of FirstEnergy. "This transaction will provide outstanding value to both companies' shareholders - offering enhanced earnings growth potential and a more competitive cost structure. Among other benefits, it would increase generation resources by 70 percent, more than double the amount of supercritical coal capacity, improve the overall environmental performance of the generation fleet, and increase our customer base by 35 percent. We also expect to create significant efficiencies and economies of scale as we share best practices across the new organization."

    Paul J. Evanson, chairman, president and chief executive officer of Allegheny, said, "This transaction significantly enhances value for our shareholders, who will receive both a meaningful premium and a substantial increase in the dividend based on FirstEnergy's current practice. The combined company will have substantial upside potential with increased scale and a more diverse generation fleet. We plan on working closely with FirstEnergy to integrate the businesses while maintaining both companies' long-standing focus on reliability, customer service, quality and safety."

    Following completion of the merger, the combined company would retain the FirstEnergy name and be headquartered in Akron, Ohio. The company's customers will continue to be served by their current electric utility companies including: Pennsylvania Electric Company (Penelec); Pennsylvania Power Company (Penn Power); Metropolitan Edison Company (Met-Ed); Allegheny Power (including: West Penn Power Company; Monongahela Power Company; The Potomac Edison Company); Ohio Edison Company; The Cleveland Electric Illuminating Company (CEI); The Toledo Edison Company; and Jersey Central Power & Light (JCP&L).

    Anthony J. Alexander will continue to serve as president and chief executive officer of FirstEnergy. Paul J. Evanson, currently chairman, president and chief executive officer of Allegheny, will become executive vice chairman of the combined company, reporting to Alexander. The FirstEnergy board will be expanded from 11 to 13 people with two additional directors from Allegheny.

About FirstEnergy
FirstEnergy is a diversified energy company headquartered in Akron, Ohio, with total annual revenues of $13 billion. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system, serving 4.5 million customers within 36,100 square miles of Ohio, Pennsylvania, New Jersey and New York; and its generation subsidiaries control more than 14,000 megawatts of capacity. More information is available on the company's Web site at www.firstenergycorp.com/investor .


About Allegheny Energy
Allegheny is an investor-owned electric utility headquartered in Greensburg, Pa., with total annual revenues of over $3 billion. The company's approximately $3.8 billion of net debt excludes securitized debt estimated to be approximately $527 million. The company owns and operates 9,700 MW of generating capacity and delivers low-cost, reliable electric service to approximately 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. More information is available on the company's Web site at www.alleghenyenergy.com .

Allegheny Energy declares dividend

GREENSBURG, Pa.— The Board of Directors of Allegheny Energy, Inc.  today authorized a cash dividend of .15 per outstanding share of the company's common stock. The dividend is payable Dec. 28, 2009 to shareholders of record at the close of business on Dec. 14, 2009. 

Allegheny Energy 

Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned electric utility with total annual revenues of over $3 billion and more than 4,000 employees. The company owns and operates generating facilities and delivers low-cost, reliable electric service to 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. For more information, visit our Web site at www.alleghenyenergy.com .

Ntelos acquires fiber optic assets from Allegheny Energy in $27 million deal

WAYNESBORO, Va. -- NTELOS announced today that it has executed an agreement to purchase certain fiber optic and network assets and related transport and data service revenues from Allegheny Energy, Inc. in a deal valued at $27 million.

The purchase includes approximately 2,200 route miles of fiber located primarily in central and western Pennsylvania and West Virginia, with portions also in Maryland, Kentucky and Ohio. There are currently two points of interconnection between the existing NTELOS fiber network and the transaction fiber assets, one each in Virginia and West Virginia.

“The purchase of these fiber assets and related revenues is significant for NTELOS as we continue to re-position our wireline business from a provider of voice access lines to a provider of high-bandwidth data products,” Frank L. Berry, NTELOS executive vice president and president of wireline operations, said in a press release issued by the company. “In addition to meaningful contributions from the customer base already in place, the expanded market area will provide NTELOS with many opportunities for new business within our core competency and consistent with our focus on strategic data and transport products.”

Projected 2009 service revenues, including revenues from NTELOS, and adjusted EBITDA, pro forma for the terms and conditions of the agreement, on this 2,200 route mile fiber network are approximately $8.0 million and $4.5 million respectively. Based on the run rate for the first six months of 2009, NTELOS’ competitive wireline segment currently generates an annualized adjusted EBITDA of approximately $27 million, utilizing its current 2,300 route mile fiber network.

NTELOS is a current customer on portions of the assets to be purchased and, as such, will achieve immediate expense synergies of approximately .5 million annually upon closing. These synergies, together with the revenue generation of the assets, result in the transaction being immediately accretive to adjusted EBITDA and free cash flow for NTELOS.

The purchase price for the transaction assets is approximately $27 million. NTELOS intends to fund the purchase from available cash on hand and the transaction is not contingent upon financing. Closing, which is expected by year-end 2009, is subject to regulatory approvals and customary closing conditions.

About NTELOS
NTELOS Holdings Corp. is an integrated communications provider with headquarters in Waynesboro, VA. NTELOS provides products and services to customers in Virginia, West Virginia, Kentucky, Ohio, Tennessee, Maryland and North Carolina, including wireless phone service, local and long distance telephone services, IPTV–based video services and data services for internet access and wide area networking. Detailed information about NTELOS is available at www.ntelos.com .

Allegheny Energy
Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned electric utility with total annual revenues of over $3 billion and more than 4,000 employees. The company owns and operates generating facilities and delivers electric service to 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. For more information, visit the company’s Web site at www.alleghenyenergy.com .