American Water To Buy Citizens
Utilities' Water Unit For $745 Million
October 18, 1999
NEW YORK -(Dow Jones)- Citizens Utilities Co. Monday announced
the sale of its water and waste-water operations to American Water
Works Inc. for $745 million as part of its strategy to concentrate on its
Stamford, Conn.-based Citizens' water unit serves 305,000 customers in Arizona,
California, Illinois, Indiana, Ohio and Pennsylvania.
Citizens (CZN) said the selling price includes $745 million in cash and $90 million in
American Water (AWK), based in Voorhees, N.J., is the nation's largest publicly owned
water utility. It expects the acquisition of Citizens' water operations to be
"mildly" dilutive initially, but will
add to earnings within 12 to 18 months.
The transaction will bolster American Water's presence in the western U.S. by adding
178,000 customers to its subsidiaries in Arizona and California. It will further expand
American's Midwest operations by adding 88,000 customers in Illinois, Indiana and Ohio,
Citizens said last month it would also sell its gas and electric businesses. The firm will
use the proceeds to fund telephone acquisitions.