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Con Edison Announces Agreement to Sell Telecom Unit to RCN
NEW YORK, Dec. 6 /PRNewswire-FirstCall/ -- Consolidated Edison, Inc. (Con Edison) announced today it has signed an agreement to sell 100 percent of its wholly owned subsidiary, Consolidated Edison Communications Holding Company, Inc., to RCN Corporation (Nasdaq: RCNI) for approximately $32 million in cash.
Con Edison Communications (CEC) builds and operates its own fiber optic network providing managed data transport services, custom networks, local and long-distance voice services and Internet services. The company services Fortune 500 corporations, local and long-distance carriers, small and medium businesses, and Internet, cable, wireless and video companies.
"RCN's well-earned reputation for excellence in customer service and network reliability makes this a smart combination for CEC customers," said Stephen B. Bram, Con Edison Group President, Energy and Communications. "In evaluating potential acquirers, we carefully considered bidders' ability to serve the commercial sector, to ensure seamless service continuity, and to strengthen the services suite over time. RCN fulfills all of these requirements through its adjacent robust fiber network, its growing business customer portfolio, and its proven capability of innovation through communications package development. CEC customers will now be able to take advantage of network presence in additional cities as well as new services such as voice and video. The combined entity should prove a stronger, more highly differentiated and better positioned competitor as it grows over time."
Following a comprehensive strategic review, Con Edison concluded that the business would have more value and serve its customers more effectively if it were further developed within a broader telecom business environment.
Peter Aquino, President and Chief Executive Officer of RCN stated, "The purchase of CEC more than doubles our network capacity in metro New York, North Jersey and Connecticut, cost-effectively expanding RCN's Residential business into a larger addressable market, and significantly deepening our reach into attractive, residential neighborhoods. CEC also provides our Business Solutions Group the ability to market a route diverse from ECS ducts, adds ten valuable river crossings, and enables us to serve a broader set of key customers. We are excited to serve CEC's valuable customers through RCN's commitment to the same seamless, high quality service they are used to with CEC, and to offer them access to our broad array of innovative products and services. We also welcome CEC's experienced management team and look forward to accelerating our unfolding growth strategy in both residential and commercial markets."
The sale, which is expected to close in the first quarter of 2006, is subject to review or approval by the City of New York, the NYS Public Service Commission and various federal, state and local regulators.
Morgan Stanley acted as the principal financial advisor to Con Edison on the transaction.
About Con Edison
Consolidated Edison, Inc. is one of the nation's largest investor-owned energy companies, with approximately $10 billion in annual revenues and $25 billion in assets. The company provides a wide range of energy-related products and services to its customers through the following subsidiaries: Consolidated Edison Company of New York, Inc., a regulated utility providing electric, gas, and steam service in New York City and Westchester County, New York; Orange and Rockland Utilities, Inc., a regulated utility serving customers in a 1,350 square mile area in southeastern New York state and adjacent sections of northern New Jersey and northeastern Pennsylvania; Con Edison Solutions, a retail energy supply and services company; Con Edison Energy, a wholesale energy supply company; Con Edison Development, a company that owns and operates generating plants and participates in other infrastructure projects; and Con Edison Communications, a telecommunications infrastructure company and service provider. For additional financial, operations and customer service information, visit Consolidated Edison, Inc.'s Web site at http://www.conedison.com.
About RCN Corporation
RCN Corporation, http://www.rcn.com, is one of the largest facilities- based competitive providers of bundled cable, high-speed internet and phone services delivered over its own fiber-optic local network to residential customers in the most densely populated markets in the U.S. RCN Business Solutions is a growing business that also provides bulk video, high-capacity and voice services to business customers. RCN provides service in the Boston, New York, Eastern Pennsylvania, Washington, D.C., Chicago, San Francisco and Los Angeles metropolitan markets. RCN also owns 49% of Megacable, one of the largest cable companies in Mexico. (RCNI-G)
This press release contains forward-looking statements of future expectations. Actual results might differ materially from those projected because of factors such as those identified in reports the company has filed with the Securities and Exchange Commission.
SOURCE Consolidated Edison, Inc.
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