DPUC Approves BHC and Village Water Company Merger.

Business Editors

BRIDGEPORT, Conn.--(BUSINESS WIRE)--May 5, 2000

The Connecticut Department of Public Utility Control (DPUC) announced today that it has approved BHC Company's (BHC) request to purchase the Village Water Company (VWC) of Simsbury, Connecticut. The decision confirms an April 19 draft decision on the merger application. BHC is the major water utility subsidiary of Aquarion Company.

"BHC's access to the managerial and technological expertise that Kelda has developed worldwide will make it an excellent acquirer," DPUC Commissioners John W. Betkoski, III, Jack R. Goldberg and Linda Kelly Arnold stated in the decision.

In November 1999 the commissioners denied without prejudice BHC's request to purchase VWC, stating that could not rule properly on the merger until they had resolved two other issues. Those issues involved an outstanding VWC land sale application and Aquarion's pending merger with Kelda Group, plc of Leeds, England. The land sale application was approved and The Kelda Group purchased Aquarion on January 7, 2000. Subsequently, BHC reapplied for the VWC acquisition on January 10, 2000.

Aquarion President and Chief Executive Officer Richard K. Schmidt said, "We are delighted by the DPUC decision to allow us to acquire the Village Water Company. We are looking forward to finalizing the purchase and offering Village Water Company customers the same level of high-quality water and outstanding customer service that we provide to a half million Connecticut citizens."

In March 1999, BHC and Village Water Company signed a letter of intent that calls for BHC to pay Village Water Company shareholders $150 per share. They signed a definitive merger agreement in June 1999. The value of the transaction is $6.5 million in cash, which includes payment for outstanding debentures that may be converted to common shares prior to closing.

Aquarion Company's principal business is public water supply. Through its BHC and Sea Cliff Water Company subsidiaries, it is one of the 10 largest investor-owned water utilities in the U.S. and serves a population of more than 500,000 in 30 Connecticut and Long Island, NY communities. Other businesses include contract management of municipal water systems and timber processing.

Kelda has annual revenues of $1.1 billion and operates in the United Kingdom and Europe. Its water and sewerage services business, Yorkshire Water Services, provide drinking water to approximately 1.9 million customers, or a population of 4.5 million, in the County of Yorkshire, England. It is one of the 10 largest water companies in the world. Yorkshire Water Services supplies its customers with 350 million of gallons of water daily, treated at 112 water treatment facilities.

Note to Reporters and Editors: For more information on Aquarion Company and its subsidiaries, please contact us on the Internet at www.aquarion.com or www.bhcco.com.