Con Edison Will Buy Northeast Utilities

Consolidated Edison Inc. said it’s buying Northeast Utilities for up to about $3.5 billion in cash and stock in a deal that would create one of the nation’s largest electric utilities. The combined company would have more than 5 million electricity customers and 1.4 million natural gas customers from the New York area to New England. The deal is the latest example of consolidation in the utility industry as deregulation has driven power distributors to seek competitive advantages by teaming up with neighbors. The companies said their boards approved a definitive merger agreement under which Consolidated Edison would pay $25 a share in cash and stock for Northeast’s 133 million common shares. The deal isn’t expected to close until the end of 2000, and it contains terms that would boost the value of the offer by that time. Northeast Utilities, based in Berlin, Conn., is the largest electric utility in New England, with more than $4 billion in annual revenue. New York-based Consolidated Edison has annual revenue of more than $7 billion.