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SJW Corp. announced today that its Board of Directors agreed with American Water Works, Inc. to terminate the Agreement and Plan of Merger ("Merger Agreement") for the acquisition of SJW by American Water Works.
The Merger Agreement allowed an 18-month period to secure necessary California Public Utilities Commission ("CPUC") approval, which period expires at the end of April. SJW received a CPUC order last week setting an updated schedule under which the CPUC would meet to consider the proposed merger in September 2001. American Water Works announced that in view of the revised schedule and continued uncertainty surrounding the California regulatory process it would exercise its right to terminate the Merger Agreement at the end of April.
"We are disappointed that this transaction could not be accomplished," said SJW Corp. President and Chief Executive Officer, W. Richard Roth. "After careful consideration of our alternatives, the SJW Board agreed with American Water Work's assessment of the regulatory uncertainty, and concluded that it was in our best interest to terminate the Merger Agreement now in order to remove business constraints imposed by the Merger Agreement. In addition, the Board has initiated a process to develop alternative plans to enhance shareholder value."