STATE APPROVES UTILITY MERGER

Goodbye Union Electric!

Hello Ameren!

It's out with the old and in with the new for Union Electric in 1998.

A $1.2 billion merger plan which was announced more than two years ago, received approval from the Securities and Exchange Commission (SEC) on the final day of 1997 for Union Electric Co. (UE) and Central Illinois Public Services Co. (CIPSCO).

A new holding company -- Ameren, short for American Energy Corporation -- came into being on day one of the new year.

Ameren will start showing up on bills sent out later this month, but until then the name Union Electric will hang around a couple of weeks on bills sent to customers in this area, said Ameren media relations spokesperson Susan Gallagher.

Ameren will also start showing up soon on the New York Stock Exchange listings.

Ameren, a new registered public utility holding company with $9 billion in assets, was created in the merger of UE and CIPSCO, Inc., parent company of CIPS.

The merger plan, which was first announced in August of 1995, received shareholder approval later in the year. But, the merger needed the blessing of a long list of state and federal agencies, ending with the SEC action Wednesday.

As of this week, the old Union Electric will be called AmerenUE and CIPSCO becomes AmerenCIPS.

The holding company and AmerenUE will be headquartered at 19th and Chouteau Ave., in the St. Louis and AmerenCIPS will be based in Springfield, Ill.

The merger gives Ameren a base in Missouri and Southern Illinois, of 1.5 million electric and 300,000 natural gas customers over a 44,500 square mile area, including the St. Louis and Metro East area.

Ameren officials say the merger will save customers $759 million over 10 years. In Illinois, that savings will come through mandate rate reductions under the new deregulation law. In Missouri, the savings will come either through rate reductions approved by the Missouri Public Service Commission, which regulates investor-owned utilities or through competitive price cuts stemming from future deregulation. Other savings will come from eliminating duplication in corporate and administrative programs, from purchasing economies and reduced electric production and gas costs, and through elimination of around 300 positions, mainly through attrition.

Stockholders will receive one share in Ameren for each Union Electric Share. Each CIPSCO share will be exchanged for 1.03 Ameren shares.

Ameren will use the symbol, AEE, on the stock exchange and had about 137 million common shares outstanding when it started trading Friday.

Under the merger agreement, Charles W. Mueller, President and CEO of the former Union Electric serves as the new company's chairman and chief executive officer.

"It is an understatement to say that we are extremely pleased that our merger has been approved," said Mueller. "Our employees have demonstrated dedication to make this merger a reality.

"The merger combines two financially strong, low-cost energy providers with common visions and strategies and highly compatible operations and managements," Mueller added.

Gary Rainwater, a former CIPSCO executive vice president at CIPSCO, and previoulsy with Union Electric, is new president of AmerenCIPS.

Clifford L. Greenwalt was president and chief executive officer of CIPSCO until his retirement Dec. 31. He cited the two companies' focus on their core energy business and the $759 million in merger savings expected over the next 10 years as "strenghs in an increasingly competitive environment."