HOUSTON, July 10, 2016 /PRNewswire/ -- Southern Company
(NYSE: SO) and Kinder Morgan, Inc.
(NYSE: KMI) today announced a natural gas pipeline venture designed
to advance both companies' leadership in energy infrastructure
development through Southern Company's acquisition of a 50 percent
equity interest in the Southern Natural Gas (SNG) pipeline system.
Kinder Morgan will continue to
operate the system. In addition, the agreement commits the
companies to cooperatively pursue specific growth opportunities to
develop natural gas infrastructure for the strategic venture.
SNG is a 7,600-mile pipeline system connecting natural gas
supply basins in Texas,
Louisiana, Mississippi, Alabama and the Gulf
of Mexico to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South
Carolina and Tennessee. SNG
is a principal transporter of natural gas to Alabama, Georgia and South
Carolina, which are part of one of the fastest-growing
natural gas demand regions in the United
States.
Southern Company, one of the nation's largest natural gas
consumers and distributors, and Kinder
Morgan, a recognized leader in natural gas pipeline
development and operations, will work together to advance both
companies' efforts to develop infrastructure important to America's
energy future.
"This transaction is consistent with the infrastructure
development strategy we have discussed for well over a year. The
company's strategic venture with Kinder
Morgan, combined with our recent additions, AGL Resources
and PowerSecure, underscore Southern Company's leadership position
in electricity and natural gas and our commitment to developing
America's energy infrastructure," said Southern Company Chairman,
President and CEO Thomas A. Fanning.
"Our new ownership stake in SNG will position Southern Company for
future growth opportunities and enhanced access to natural gas,
which are expected to benefit customers and investors alike."
"Southern Company has been a valued customer of SNG for many
years and this agreement draws on the strengths of both companies,"
said Norman G. Holmes, president of
Kinder Morgan South Region Pipelines. "We are very pleased to
deepen our relationship with them and excited about the growth
opportunities this strategic relationship will provide."
Steve Kean, Kinder Morgan president and chief executive
officer, added, "We plan to use all of the proceeds from this
transaction to reduce debt at KMI. This is another step towards
achieving our stated goals of strengthening our balance sheet and
positioning the company for long-term value creation."
Inclusive of existing SNG debt, the transaction equates to an
SNG total enterprise value of approximately $4.15 billion which implies a value of
$1.47 billion for Southern Company's
50 percent share of the equity interest. Southern Company expects
to finance the initial purchase, as well as any related future
growth opportunities in a credit-supportive manner.
The transaction is subject to the notification and clearance and
reporting requirements under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. The companies expect to complete the
transaction in the third quarter or early in the fourth quarter of
2016.
Jones Day, Gibson Dunn &
Crutcher LLP, Troutman Sanders LLP and Balch & Bingham LLP are
serving as legal counsel to Southern Company, and Bracewell LLP and
Weil, Gotshal & Manges LLP are serving as legal counsel to
Kinder Morgan.
About Kinder Morgan
Kinder Morgan, Inc. (NYSE: KMI)
is the largest energy infrastructure company in North America. It owns an interest in or
operates approximately 84,000 miles of pipelines and approximately
180 terminals. The company's pipelines transport natural gas,
gasoline, crude oil, CO2 and other products, and its terminals
store petroleum products and chemicals, and handle bulk materials
like coal and petroleum coke. For more information please visit
www.kindermorgan.com.
About Southern Company
Southern Company (NYSE: SO) is America's premier energy company,
with 44,000 megawatts of generating capacity and 1,500 billion
cubic feet of combined natural gas consumption and throughput
volume serving 9 million electric and gas utility customers through
its subsidiaries. The company provides clean, safe, reliable and
affordable energy through electric utilities in four states,
natural gas distribution utilities in seven states, a competitive
generation company serving wholesale customers across America and a
nationally recognized provider of customized energy solutions, as
well as fiber optics and wireless communications. Southern Company
brands are known for excellent customer service, high reliability
and affordable prices that are below the national average. Through
an industry-leading commitment to innovation, Southern Company and
its subsidiaries are inventing America's energy future by
developing the full portfolio of energy resources, including
carbon-free nuclear, 21st century coal, natural gas, renewables and
energy efficiency, and creating new products and services for the
benefit of customers. Southern Company has been named by the U.S.
Department of Defense and G.I. Jobs
magazine as a top military employer, recognized among the Top 50
Companies for Diversity by DiversityInc, listed by Black Enterprise
magazine as one of the 40 Best Companies for Diversity and
designated a Top Employer for Hispanics by Hispanic Network. The
company has earned a National Award of Nuclear Science and History
from the National Atomic Museum Foundation for its leadership and
commitment to nuclear development and is continually ranked among
the top utilities in Fortune's annual World's Most Admired Electric
and Gas Utility rankings. Visit our website at
www.southerncompany.com.
Cautionary Statements Regarding Forward-Looking
Information
This release contains forward-looking statements which are
made pursuant to safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include statements, among other things, concerning the expected
benefits of the transaction, including future growth opportunities,
financing plans for the transaction and the expected timing of the
completion of the transaction. These forward-looking statements are
often characterized by the use of words such as "expect,"
"anticipate," "plan," "believe," "may," "should," "will," "could,"
"continue", "opportunity" and the negative or plural of these words
and other comparable terminology. Although Southern Company and
Kinder Morgan believe that the
expectations reflected in such forward-looking statements are
reasonable, such statements involve risks and uncertainties and
undue reliance should not be placed on such statements. Certain
material factors or assumptions are applied in making
forward-looking statements. Actual results may differ materially
from those expressed or implied in such statements. Important
factors that could cause actual results to differ materially from
these expectations include, among other things, the following: the
failure to receive, on a timely basis or otherwise, the required
approvals by government or regulatory agencies (including the terms
of such approvals); the possibility that long-term financing for
the transaction may not be put in place prior to the closing; the
risk that a condition to closing of the transaction may not be
satisfied; the possibility that the anticipated benefits from the
transaction cannot be fully realized 4 or may take longer to
realize than expected; the diversion of management time on
transaction-related issues; the impact of legislative, regulatory
and competitive changes; and other risk factors relating to the
energy industry, as detailed from time to time in each of Southern
Company's and Kinder Morgan's
reports filed with the Securities and Exchange Commission. There
can be no assurance that the transaction will in fact be
consummated.
Additional information about these factors and about the
material factors or assumptions underlying such forward-looking
statements may be found under Item 1.A. in Southern Company's and
Kinder Morgan's Annual Reports on
Form 10-K for the fiscal year ended December
31, 2015. The foregoing list of important factors that may
affect future results is not exhaustive. When relying on
forward-looking statements to make decisions, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. All subsequent written and oral
forward-looking statements concerning the transaction or other
matters attributable to Southern Company, Kinder Morgan or any other person acting on
their behalf are expressly qualified in their entirety by the
cautionary statements referenced above. The forward-looking
statements contained herein speak only as of the date of this
release. Neither Southern Company nor Kinder Morgan undertakes any obligation to
update or revise any forward-looking statement, except as may be
required by law.
Logo - http://photos.prnewswire.com/prnh/20080801/SOCOLOGO
Logo - http://photos.prnewswire.com/prnh/20160710/388111LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/southern-company-kinder-morgan-enter-southern-natural-gas-pipeline-strategic-venture-300296288.html
SOURCE Southern Company