Southern Company makes bid for South Western Electricity plc

The Southern Company announced today it has submitted a bid for South Western Electricity plc (SWEB) of Bristol, England. The bid was announced in England on behalf of The Southern Company by Southern Electric International — a Southern Company subsidiary that operates power generation facilities and electric systems worldwide.

The offer will be ?38 (approximately $61 at current exchange rates) in cash and ?52 (approximately $83) in bonds for every 10 shares, valuing each SWEB share at ?9 (approximately $14). The total value of the offer is approximately ?1,000 million ($1.6 billion).

“International diversification is a key element of our strategy for long-term growth,” said Southern Electric International President Tom Boren. “The acquisition of SWEB will be another important step in implementing this plan.”

Other details of the offer include:

· A full cash alternative of ?9 (approximately $14) per SWEB share.

· Shareholders will receive the proposed final dividend of 20.3p (approximately 32 cents).

· The offer will allow shareholders the option of receiving shares in the National Grid, should those shares be publicly traded. The National Grid owns and operates the U.K. electric transmission system.

“We are offering a full price for SWEB, which will give its shareholders a substantial premium,” Boren said. “Our aim is that SWEB’s customers will also benefit from the acquisition through our ability to provide a high level of service at low costs. At the same time we are confident that, under our management, SWEB will be a long-term source of value for The Southern Company’s own shareholders.”

Southern Electric, a unit of The Southern Company, develops, builds, owns, and operates power production facilities and provides a broad range of technical services to industrial companies and utilities in the U.S. and international markets.

The Southern Company (NYSE: SO) is also the parent firm of five electric utilities: Alabama Power, Georgia Power, Gulf Power, Mississippi Power, and Savannah Electric. Other subsidiaries include Southern Nuclear and Southern Company Services. Together, these utilities make up one of the largest investor-owned electric utility groups in the United States.



Southern Electric International`s offer is not being made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex or telephone) of interstate or foreign commerce of, or through any facility of a national securities exchange in, the United States, and the offer cannot be accepted by any such use, means, instrumentality or through any such facility or from within the United States, Canada or Australia.

The Bonds and the Grid Bonds have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act") and are subject to U.S. tax law requirements. Accordingly, such securities may not be offered, sold or delivered in the United States or to U.S. persons except pursuant to an applicable exemption from the registration requirements of the Securities Act and in a transaction permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given them by the U.S. Internal Revenue Code and regulations thereunder.