Southwest Gas merger off

David Strow

Friday, Jan. 21, 2000 | 4:21 a.m.

The $1.8 billion merger between Las Vegas-based Southwest Gas Corp. and an Oklahoma company was called off Friday.

ONEOK Inc. of Tulsa, Okla., announced that its board of directors voted to cancel the merger agreement, citing financial risks associated with Southwest Gas. The merger was first announced in December 1998.

"We worked very hard to make this deal happen, but the bottom line is that even if we assume that all regulatory approvals could be received in a timely manner, there is simply too much financial risk associated with Southwest Gas right now and we have a responsibility to protect our shareholders from excessive risk," said ONEOK Chairman and Chief Executive Larry Brummett in a statement.

ONEOK's application to acquire Southwest Gas had been stalled in Arizona since September, following allegations of wrongdoing involving ONEOK, Southwest and several Arizona regulatory officials. These charges were first raised in a racketeering lawsuit filed by Southwest suitor Southern Union Co. against Southwest Gas and ONEOK in July.

These charges prompted the staff of the Arizona Corporation Commission to recommend against approval of the merger earlier this month.

In the ONEOK statement, Brummett said Southern Union's pending claims against Southwest Gas created financial concerns for the company.