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28 June 2006 -- Duke Energy's board of directors yesterday unanimously authorized management to pursue a plan to create two separate publicly traded companies by spinning off Duke Energy's natural gas businesses to Duke Energy shareholders.
Once the transaction is completed, Duke Energy's shareholders will own 100 percent of the equity in both Duke Energy and a new gas company. The new gas company, which has yet to be named, will consist of Duke Energy's Natural Gas Transmission (DEGT) business unit, which includes Union Gas, and Duke Energy's 50-percent ownership interest in Duke Energy Field Services (DEFS). The businesses remaining in Duke Energy will be the U.S. Franchised Electric & Gas business unit, the Commercial Power business unit, the International business unit and Crescent Resources.
The company is targeting a Jan. 1, 2007, effective date for the transaction and expects the transaction to qualify for tax-free treatment for U.S. federal income tax purposes to both Duke Energy and its shareholders.
Paul M. Anderson, chairman of the board, said, "As two market-leading companies, the stand-alone electric and gas businesses will have increased flexibility to seize expansion opportunities and grow at a higher rate."
In conjunction with today's announcement, the Duke Energy board decided that Anderson will be named non-executive chairman of the gas company board of directors. It also designated individuals to fill key management roles at the gas company:
- Fred Fowler, currently group executive and president of Duke Energy Gas, will serve as president and CEO;
- Greg Ebel, currently president of Union Gas, will be chief financial officer (CFO);
- Alan Harris, currently group vice president and CFO of DEGT, will serve as chief development officer;
- Bill Garner, currently group vice president for corporate development at DEGT, will be general counsel;
- Martha Wyrsch, currently president of DEGT, will serve as president and CEO of the new gas company's transmission business which will include natural gas transmission, storage, the western Canadian gathering, processing and natural gas liquids operations, and Union Gas; and,
- Bill Easter will continue as president and CEO of DEFS, reporting to the DEFS board of directors
Upon completion of the gas company spin, Anderson will resign from the Duke Energy board and Rogers will be appointed chairman of Duke Energy's board of directors. Rogers will also continue in his role as president and CEO. David Hauser, currently group executive and CFO, will also continue in his role.
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