Allegheny Power 2010 Annual Report Download - page 151

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136
22. PROPOSED MERGER WITH ALLEGHENY
As previously disclosed, on February 10, 2010, FirstEnergy entered into an Agreement and Plan of Merger, subsequently
amended on June 4, 2010 (Merger Agreement), with Element Merger Sub, Inc., a Maryland corporation, its wholly-owned
subsidiary (Merger Sub) and Allegheny, a Maryland corporation. Upon the terms and subject to the conditions set forth in
the Merger Agreement, Merger Sub would merge with and into Allegheny with Allegheny continuing as the surviving
corporation and a wholly-owned subsidiary of FirstEnergy. Pursuant to the Merger Agreement, upon the closing of the
merger, each issued and outstanding share of Allegheny common stock, including grants of restricted common stock,
would automatically be converted into the right to receive 0.667 of a share of common stock of FirstEnergy, and
Allegheny stockholders would own approximately 27% of the combined company. FirstEnergy would also assume all
outstanding Allegheny debt.
Pursuant to the Merger Agreement, completion of the merger is conditioned upon, among other things, shareholder
approval of both companies, which was received on September 14, 2010; the SEC’s clearance of a registration
statement registering the FirstEnergy common stock to be issued in connection with the merger, which occurred on
July 16, 2010. Approval of the merger was received from the VSCC on September 9, 2010. Approval from the FERC
and from the PSCWV was received on December 16, 2010. Approval from the MDPSC was received on January 18,
2011. On January 7, 2011, we were notified by the DOJ that it had completed its review of the merger and closed its
investigation. The proposed merger is also conditioned upon receipt of the approval of the PPUC. The Merger
Agreement also contains certain termination rights for both FirstEnergy and Allegheny, and further provides for the
payment of fees and expenses upon termination under specified circumstances.
FirstEnergy and Allegheny currently anticipate completing the merger in the first quarter of 2011. Although FirstEnergy
and Allegheny believe that they will receive the required authorizations, approvals and consents to complete the merger,
there can be no assurance as to the timing of these authorizations, approvals and consents or as to FirstEnergy’s and
Allegheny’s ultimate ability to obtain such authorizations, consents or approvals (or any additional authorizations,
approvals or consents which may otherwise become necessary) or that such authorizations, approvals or consents will
be obtained on terms and subject to conditions satisfactory to Allegheny and FirstEnergy. Further information concerning
the proposed merger is included in the Registration Statement filed by FirstEnergy with the SEC in connection with the
merger.
In connection with the proposed merger, FirstEnergy recorded approximately $65 million ($47 million after tax) of merger
transaction costs in the year ended December 31, 2010. These costs are expensed as incurred.