InterNorth
Encyclopedia
InterNorth Inc. was a very large energy company headquartered in Omaha, Nebraska
, in the United States
, specializing in natural gas
pipelines but also a force in the plastics industry, coal and petroleum exploration and production. They operated the largest natural gas pipeline in North America. It was formed in 1979 as a holding company
for Northern Natural Gas Company (founded in 1931), Northern Liquid Fuels Company, Northern Petrochemicals Company, Northern Propane Gas Company, and Northern Border Pipeline Company. InterNorth was briefly renamed HNG/InterNorth in 1985, following its takeover of Houston Natural Gas
Company, before taking the name Enron
Corporation just six months later.
Later that year, the company launched an unsolicited takeover bid for Crouse-Hinds Company, which wound up being acquired by Cooper Industries
the following year. The company continued to pursue expansion opportunities and, in 1985, reached a deal, seen by some as overpriced, to acquire the smaller competitor Houston Natural Gas
(HNG) Company. InterNorth was an arbitrage target and acquired HNG as a poison pill. Regardless it was still a target of Irwin Jacobs of Minneapolis. Ex-HNG CEO Ken Lay "borrowed" over $400,000,000.00 from the employee stock ownership program to buy back Jacobs stock, so he could keep his job and cover other financial losses of Enron as early as 1987. Lay then froze the ESOP for seven years except for retirement or death benefits.
Although intended to secure InterNorth's independence, the HNG takeover proved a "wag-the-dog" transaction: despite an initial plan for dual headquarters in Omaha and Houston, with InterNorth CEO Samuel Segnar in control, the company soon was based entirely in Houston and run by HNG's CEO, Kenneth Lay
, who renamed the company Enron Corporation. Initially, Mr. Lay and his secretary, Nancy McNeil picked the name Enteron, due to the positive connotations of the words "enter" and "on'. though it was soon discovered to be a Greek term for digestive system or intestine. The markets reacted with hilarity and a month later he changed the name again to ENRON costing many millions in advertising, signage, stationery and contracts. Nancy McNeil is now married to Rich Kinder of Kinder Morgan
who was the #2 executive of Enron before 1997.
The most valuable asset of Internorth had been Northern Natural Gas company which was at one time the largest natural gas distributor in North America. After the bankruptcy of Enron, Northern Natural Gas briefly became part of Dynegy Corp of Houston whose Chairman Daniel Dienstbier had been president of NNG before Ken Lay seized control of Internorth. Dynegy
then sold NNG to Warren Buffett
's Berkshire Hathaway
who moved it back to Omaha.
Omaha, Nebraska
Omaha is the largest city in the state of Nebraska, United States, and is the county seat of Douglas County. It is located in the Midwestern United States on the Missouri River, about 20 miles north of the mouth of the Platte River...
, in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, specializing in natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
pipelines but also a force in the plastics industry, coal and petroleum exploration and production. They operated the largest natural gas pipeline in North America. It was formed in 1979 as a holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
for Northern Natural Gas Company (founded in 1931), Northern Liquid Fuels Company, Northern Petrochemicals Company, Northern Propane Gas Company, and Northern Border Pipeline Company. InterNorth was briefly renamed HNG/InterNorth in 1985, following its takeover of Houston Natural Gas
Houston Natural Gas
Houston Natural Gas Company was a gas utility headquartered in Houston, Texas. The company was acquired by InterNorth Inc. in 1985, with HNG executives taking top positions at InterNorth. Following the transaction, InterNorth was renamed Enron Corporation, and the company headquarters was moved...
Company, before taking the name Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
Corporation just six months later.
Later that year, the company launched an unsolicited takeover bid for Crouse-Hinds Company, which wound up being acquired by Cooper Industries
Cooper Industries
Cooper Industries is a former US-based company that in 2009 switched its incorporation office from Bermuda to Ireland, maintaining its chief operational offices in Houston, Texas. It produces transformers, tools and electrical equipment, employing 29,000 staff around the world. Revenue in 2007 was...
the following year. The company continued to pursue expansion opportunities and, in 1985, reached a deal, seen by some as overpriced, to acquire the smaller competitor Houston Natural Gas
Houston Natural Gas
Houston Natural Gas Company was a gas utility headquartered in Houston, Texas. The company was acquired by InterNorth Inc. in 1985, with HNG executives taking top positions at InterNorth. Following the transaction, InterNorth was renamed Enron Corporation, and the company headquarters was moved...
(HNG) Company. InterNorth was an arbitrage target and acquired HNG as a poison pill. Regardless it was still a target of Irwin Jacobs of Minneapolis. Ex-HNG CEO Ken Lay "borrowed" over $400,000,000.00 from the employee stock ownership program to buy back Jacobs stock, so he could keep his job and cover other financial losses of Enron as early as 1987. Lay then froze the ESOP for seven years except for retirement or death benefits.
Although intended to secure InterNorth's independence, the HNG takeover proved a "wag-the-dog" transaction: despite an initial plan for dual headquarters in Omaha and Houston, with InterNorth CEO Samuel Segnar in control, the company soon was based entirely in Houston and run by HNG's CEO, Kenneth Lay
Kenneth Lay
Kenneth Lee "Ken" Lay was an American businessman, best known for his role in the widely reported corruption scandal that led to the downfall of Enron Corporation. Lay and Enron became synonymous with corporate abuse and accounting fraud when the scandal broke in 2001...
, who renamed the company Enron Corporation. Initially, Mr. Lay and his secretary, Nancy McNeil picked the name Enteron, due to the positive connotations of the words "enter" and "on'. though it was soon discovered to be a Greek term for digestive system or intestine. The markets reacted with hilarity and a month later he changed the name again to ENRON costing many millions in advertising, signage, stationery and contracts. Nancy McNeil is now married to Rich Kinder of Kinder Morgan
Kinder Morgan
Kinder Morgan, Inc. is an American energy company. It is also, through a subsidiary, the general partner of and owner of many of the interests in Kinder Morgan Energy Partners, a publicly traded pipeline and terminal limited partnership....
who was the #2 executive of Enron before 1997.
The most valuable asset of Internorth had been Northern Natural Gas company which was at one time the largest natural gas distributor in North America. After the bankruptcy of Enron, Northern Natural Gas briefly became part of Dynegy Corp of Houston whose Chairman Daniel Dienstbier had been president of NNG before Ken Lay seized control of Internorth. Dynegy
Dynegy
Dynegy Inc. , based in Houston, Texas, United States, is a large owner and operator of power plants and a player in the natural gas liquids and coal business...
then sold NNG to Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
's Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
who moved it back to Omaha.