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Wisconsin Energy buys Integrys for US$5.8 bil.

MILWAUKEE, Wisconsin -- Wisconsin Energy Corp. is buying Integrys Energy Group Inc. for about US$5.8 billion in cash and stock to form a more diverse Midwest electric and natural gas delivery company.

The combined company will be called WEC Energy Group Inc. and serve more than 4.3 million total gas and electric customers across Wisconsin, Illinois, Michigan and Minnesota.

The transaction will combine Wisconsin Energy's electric and gas utility, We Energies, with Integrys' electric and gas utilities, Wisconsin Public Service, Peoples Gas, North Shore Gas, Minnesota Energy Resources and Michigan Gas Utilities.

WEC Energy will hold a 60-percent stake in American Transmission Co.

Under the deal announced Monday, Integrys stockholders will receive 1.128 Wisconsin Energy shares and US$18.58 in cash for each share they own. That amounts to US$71.47 per Integrys share, a 17 percent premium to the company's Friday closing stock price of US$60.95. The payout will be 74 percent in stock and 26 percent in cash.

Wisconsin Energy and Integrys put the transaction's total value at US$9.1 billion including the assumption of US$3.3 billion in debt.

Shareholders of Chicago-based Integrys will own approximately 28 percent of the combined company. Integrys shares surged US$8.24, or 13.5 percent, to US$69.19 in morning trading. Wisconsin Energy shares slipped 86 cents, or 1.8 percent, to US$46.03.

Wisconsin Energy Chairman and CEO Gale Klappa will serve in the same posts for the combined company. Integrys Chairman and CEO Charlie Schrock will stay in his current roles until the acquisition is complete. He will retire upon the closing.

WEC Energy will be headquartered in metropolitan Milwaukee with operating headquarters in Chicago, Green Bay and Milwaukee. Wisconsin Energy is based in Milwaukee.

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