Bauerly Brothers, Inc. Merges With Knife River Corporation.

Business Editors

BISMARCK, N.D.--(BUSINESS WIRE)--April 20, 2001

MDU Resources Group, Inc. (NYSE:MDU) announced that Bauerly Brothers, Inc. (Bauerly), a privately held contractor and construction materials company serving central Minnesota, has joined with, and become part of, Knife River Corporation, the construction materials and mining subsidiary of MDU Resources. Financial details of the merger were not disclosed. MDU Resources anticipates that the acquisition will be accretive to earnings per share.

Bauerly specializes as a general contractor in paving highways. The company has won national and state awards for its work as a general contractor. In addition, the company is a major supplier of ready-mixed concrete in central Minnesota. Bauerly also owns or controls large supplies of aggregates within its 24-county market area.

Bauerly's headquarters are in Sauk Rapids, Minnesota. The company was incorporated in the mid-1960s by members of the Leo and Agnes Bauerly family. From its beginning, the company focus has been on providing customers with quality construction materials products and services. Over the years, Bauerly's operations have spread into new areas, including along the Interstate-94 and Interstate-35 corridors north and west of the Twin Cities. The market served by Bauerly contains many of the fastest growing counties in Minnesota and is among the fastest growing areas in the United States.

"The merger between our company and Knife River Corporation is designed to help both companies achieve long-term goals," said Jerry Bauerly, president of Bauerly Brothers, Inc. "We are serving more customers than ever before and seeing more growth opportunities ahead. This merger will give us added resources to meet our long-term objectives."

"The addition of Bauerly broadens the geographic scope we seek at our construction materials operations," said Terry Hildestad, president and chief executive officer of Knife River Corporation. "This company meets all of our strategic objectives. The company will continue to be operated as Bauerly Brothers, Inc., and there will be no change in operating management or key personnel. The experienced leadership team who built the company and focused their growth on customer service will remain the same."

The information in this release includes certain forward-looking statements, including statements concerning accretive earnings per share, within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, actual results may differ materially. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the effects of competition, and the ability to effectively integrate acquired operations. For a discussion of other important factors, refer to the MDU Resources 2000 Annual Report on Form 10-K at Item 7 - Management's Discussion and Analysis - Safe Harbor for Forward-looking Statements.

Knife River Corporation mines and markets aggregates and related value-added construction materials products and services in Alaska, California, Hawaii, Minnesota, Montana, Oregon, Washington and Wyoming and also operates lignite coal mines in Montana and North Dakota. Knife River Corporation is an indirect wholly-owned subsidiary of MDU Resources Group, Inc., a multidimensional natural resource enterprise traded on the New York Stock Exchange as "MDU." For more information about Knife River Corporation, visit the company's Web site at www.kniferiver.com.