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Northeast Utilities Buys Nstar

October 19, 2010

THE DEAL: Northeast Utilities buys Nstar for $4.17 billion, creating the biggest utility in New England. It will serve 3.5 million electric and gas customers in Connecticut, Massachusetts and New Hampshire.

THE REASON: Northeast needs cash to fund ambitious transmission construction plans; Nstar has cash, but not the size or scope to pursue large growth plans without Northeast.

WHO IS AFFECTED: Utility customers to see no change in rates, though companies expect cost savings to benefit ratepayers. Northeast shareholders to get a bigger dividend, Nstar shareholders get access to growth.