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* <br />/ <br />£? <br />r;* 1 <br />J J <br />' * <br />I ?i <br />i 1 <br />News Release <br />Contacts: <br />Houston Industries Inc. <br />Dan Bulla (investors), 713-207-3120 <br />Sandy Fruhman (media), '^13-207-3123 <br />For release: <br />August 12,1996 <br />NorAm Energy <br />Randy Burkhalter (investors), 713-654-7502 <br />Ellen Orsbum (media), 713-654-5930 <br />Houston Industries Incorporated Announces <br />Agreement to Acquire NorAm Energy Corp. <br />Houston, August 12-Houston Industries Incorporated (NYSE: HOU) and NorAm <br />Energy Corp" (NYSE: NAE) today announced that they have signed a definitive <br />agreement for Houston Industries to acquire NorAm Energy in a transaction valued at <br />$3.8 billion (consisting of $1.4 billion of debt and preferred stock assumed by Houston <br />Industries and $2.4 billion for common stock). The combined enterprise will have a <br />total market capitalization of approximately $14.3 billion. <br />Under the terms of the agreement, which has been approved by the boards of directors <br />of both Houston Industries and NorAm Energy, Houston Industries will pay $16.00 <br />for each NorAm common share outstanding, 50% of which will be paid in cash and <br />50% in Houston Industries common stock. After closing, four NorAm Board members <br />will join the Houston Industries Board of Directors. The acquisition is subject to <br />shareholder approval of both companies and various regulatory approvals. <br />The proposed transaction combines NorAm Energy, the nation ’s third largest natural <br />gas utility serving 2.7 million customers in six states, with Houston Industries, a <br />holding company involved in the electric utility and unregulated energy businesses in <br />the United States and in foreign markets. The corporate offices will remain in <br />Houston, where both companies are currently headquartered, and Don Jordan will <br />continue as Chairman and CEO of Houston Industries. <br />Houston Industries’ regulated subsidiary, Houston Lighting <Sc Power Company, is the <br />nation's ninth-largest electric utility in terms of kilowatt-hour sales. Its service <br />territory includes ^ht City of Houston and surrounding commumties with a total of <br />1.5 million customers. HI Energy, Houston Industries' principal unregulated <br />subsidiary, pursues foreign utility privatizations and the development of unregulated <br />power generation projects, primarily in foreign markets. It has projects and interests <br />in Argentina, Brazil, and India.