Fortis to Acquire Cinergy Marketing and Trading in North America and Canada Acquisition Strengthens Fortis' Presence in the Energy Sector

BRUSSELS, Belgium, and UTRECHT, Netherlands, and HOUSTON, June 27 /PRNewswire-FirstCall/ -- Fortis announced today that they have signed an agreement with Duke Energy (NYSE:DUK) ("Duke") whereby Fortis will acquire Cinergy Marketing & Trading, LP, a Delaware limited partnership, and Cinergy Canada, Inc, an Alberta corporation, both fully owned subsidiaries of Duke and together referred to as CMT. CMT is a Houston, Texas based, marketing and trading platform with operations in all key North American power and gas markets. The base purchase price is approximately EUR 165 million; Fortis will also pay at close an amount equal to the value of the trading portfolio. The total purchase price will be of the order of EUR 330 million.

The transaction will further strengthen Merchant Banking's growing products and services offering to companies active in the energy, commodities, and transportation sectors. The CMT platform in physical gas and power trading, combined with the marketing and structuring capabilities of Fortis, will be a key component of Fortis Merchant Banking growing energy practice.

The transaction will offer many new opportunities to Fortis and its clients:

    -- Access to new client accounts: The acquisition strengthens Fortis'
       foundation with existing clients and opens access to new accounts;

    -- Enhanced product capabilities at the service of our clients: Fortis
       will be able to offer a full range of physical and financial products,
       and develop a complete set of energy financing and hedging products to
       meet its clients' needs; and

    -- A wider geographic scope: Fortis will expand its geographic reach in
       terms of transacting and meeting individual client needs at specific
       locations.

"With energy trading being one of the strong growth drivers of Fortis Merchant Banking's strategy and with the deep expertise and financial commitments built over the years in Energy, Commodities and Transportation, CMT will give Fortis the physical trading capacities it needs to become a key player in energy banking in North America, and to enhance its products on a global basis" said Filip Dierckx, CEO of Fortis Merchant Banking. "We are impressed by the skills and accomplishments of the CMT employees and they will play a key role in the further development of our goal to become a leading player in the financial and physical trading markets."

Over the past five years, Fortis has steadily grown its Merchant Banking activities. With a net profit of EUR 1 bn in 2005, the internationally operated wholesale bank of Fortis contributed for more than 25% to the Fortis results. In Europe Merchant Banking offers a complete range of financial services to corporate and institutional clients, and is also a worldwide leader in specific client and product niches. Its geographic strategy is to build these product and client niches in the US and Asia. Looking to further boost its growth and to carry out its strategy, the bank has made the energy sector a key growth area.

"This is a real opportunity for our operations" said Jim Fallon, President of CMT. "We have a very solid operational platform and the combination with Fortis will allow for substantial leverage of the business through its financial strength, as well as its marketing and structuring capabilities."

CMT's activities are organized into regional desks across North America. As a top 10 Power and Natural Gas trading company its activities cover the USA and Canada. CMT has a market presence in all major liquid power and gas points in North America. CMT also has a solid organization staffed by experienced professionals. CMT employs 200 persons, in their headquarters in Houston, Texas, and 25 in the Calgary, Alberta.

After the acquisition, the combined team will be co-headed by Jim Fallon, actual President of CMT, and David Jones, US Head of Energy Trading at Fortis. Fortis will maintain CMT's presence in Houston and Calgary.

Over and above being fully in line with Fortis' strategic intent, this transaction also meets Fortis' financial criteria for acquisitions, as it will already be earnings accretive as of the first year and is expected to yield a return on investment (ROI) of about 15% by 2009.

This transaction is subject to the customary closing conditions, including all regulatory approvals, and is expected to be finalized by end of 2006.

About Fortis Merchant Banking:

Merchant Banking is Fortis' internationally operated wholesale bank with over 4,000 professionals. We cater a wide range of financial products and services for the needs of Corporate clients and Institutional Investors. In the US Merchant Banking is active in global markets and banking activities, and builds on its longstanding expertise in sectors such as commodities, oil & gas, intermodal and shipping. It has offices in New York, Stamford, Jersey City, Denver, San Francisco, Chicago, Dallas and Calgary.

About Fortis

Fortis is an international financial services provider engaged in banking and insurance. We offer our personal, business and institutional customers a comprehensive package of products and services through our own channels, in collaboration with intermediaries and through other distribution partners.

With a market capitalisation of EUR 37 billion (31/05/2006), Fortis ranks among the twenty largest financial institutions in Europe. Our sound solvency position, our presence in 50 countries and our dedicated, professional workforce of 58,000 enable us to combine global strength with local flexibility and provide our clients with optimum support. More information is available on http://www.fortis.com .

About Duke

Duke Energy is a diversified energy company with a portfolio of natural gas and electric businesses, both regulated and unregulated, and an affiliated real estate company. Duke Energy supplies, delivers and processes energy for customers in the Americas. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at http://www.duke-energy.com .

     Press Contacts:
     Brussels:
     +32 (0) 2 565 35 84

     Utrecht:
     +31 (0) 30 226 32 19

     United States
     (212) 850-5615       Amy Rosenberg       Financial Dynamics

     Investor Relations:
     Brussels: +32 (0) 2 510 53 91      Utrecht:  +31 (0) 30 226 32 20

Fortis will hold a teleconference for the media today, Tuesday 27 June 2006, at 10am EST, 4pm CET.

     The dial in numbers for the call are:
     +1 718 354 1152 (United States)
     +44 (0)20 7365 1843 (United Kingdom)
     +32 (0)2 400 6875 (Belgium)
     +31 (0)20 713 2936 (The Netherlands)

     A repeat of the conference call will be available until 4 July 2006:
     +1 718 354 1112 (United States)
     +44 (0)20 7806 1970 (United Kingdom)
     +32 (0)24 003 465 (Belgium)
     +31 (0)207 132 791 (The Netherlands)

Source: Fortis

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