NiSource to Buy Columbia Energy Group

Utility holding company NiSource Inc. said it would buy Columbia Energy Group in a $6-billion cash and stock deal just four months after the natural-gas storage company rejected a higher offer from NiSource. The transaction, which values Columbia at $72.60 a share versus a previous offer of $74, would boost NiSource’s customer base to 4.1 million, making it the largest natural-gas company east of the Rocky Mountains. NiSource also would gain control of the nation’s largest underground natural-gas storage facility. After rejecting NiSource’s bid made last fall, Hendon, Va.-based Columbia began soliciting offers and received expressions of interest, but no offer materialized. Merrillville, Ind.-based NiSource also will assume $2.5 billion in debt in the deal. Columbia shares rose $2.31 to close at $59.38, and NiSource fell $2.56 to close at $13, both on the New York Stock Exchange.