El Paso Holders Overwhelmingly Approve Kinder Morgan Merger

   DOW JONES NEWSWIRES 
 

El Paso Corp. (EP) shareholders overwhelmingly approved the company's sale to Kinder Morgan Inc. (KMI), which would create North America's largest natural-gas pipeline operator.

Kinder Morgan agreed to buy El Paso in a cash and stock deal valued at $21.1 billion when announced in October.

Based on preliminary results, about 79% of El Paso's shares outstanding were voted and 95% of the votes cast were in favor of the merger.

"We view this as a tremendous outcome for our shareholders and customers, and we look forward to closing the transaction, which is still expected to occur in the second quarter," said El Paso Chairman and Chief Executive Doug Foshee.

After the closing, Kinder Morgan shareholders are expected to own about 68% of the combined company, with El Paso shareholders owning the remainder.

El Paso had delayed the vote from earlier this week in the wake of last week's opinion from Delaware Chancellor Leo Strine, which called into question whether El Paso Chief Executive Douglas Foshee and the company's investment banks were pushing for the best deal for shareholders.

Some shareholders had sued over the deal alleging that Goldman Sachs, which had been advising El Paso on a separate transaction, should not have had any role in the Kinder Morgan negotiations because it also owned 19% of Kinder Morgan.

The merger agreement, one of the largest seen last year, comes in the wake of a major shift in pipeline operations, caused by a boom in natural-gas production from previously untapped reservoirs of unconventional gas in Texas, Louisiana, and the U.S. Northeast. Pipeline companies have been trying to redesign their routes to connect fast-growing markets in the southern U.S. with emerging energy production regions across North America.

-By Melodie Warner, Dow Jones Newswires; 212-416-2283; [e-mail]

--David Benoit contributed to this article.