DFAN14A

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
                               (AMENDMENT NO. )

Filed by the Registrant |_|

Filed by a Party other than the Registrant |X|

Check the appropriate box:

|_|   Preliminary Proxy Statement
|_|   Confidential, for Use of the Commission Only (as permitted by
      Rule 14a-6(e)(2))
|_|   Definitive Proxy Statement
|_|   Definitive Additional Materials
|X|   Soliciting Material Pursuant to Section 240.14a-12

                             SOUTHERN UNION COMPANY
- --------------------------------------------------------------------------------

                (Name of Registrant as Specified In Its Charter)

                         SANDELL ASSET MANAGEMENT CORP.
                       CASTLERIGG MASTER INVESTMENTS LTD.
                        CASTLERIGG INTERNATIONAL LIMITED
                    CASTLERIGG INTERNATIONAL HOLDINGS LIMITED
                     CASTLERIGG GLOBAL SELECT FUND, LIMITED
                                    CGS, LTD.
                          CASTLERIGG GS HOLDINGS, LTD.
                                THOMAS E. SANDELL
                                  NICK GRAZIANO
                                JONATHAN R. MACEY
                                WILLIAM I. TILLES
- --------------------------------------------------------------------------------

    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)




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     On January 16, 2007, Sandell Asset Management Corp. issued a press release,
a copy of which is filed herewith as Exhibit 1. Information regarding Sandell
Asset Management Corp. and other potential participants in the intended
solicitation of proxies with respect to the 2007 annual meeting of stockholders
of Southern Union Company is filed herewith as Exhibit 2.

EX-99

                                                                      EXHIBIT 1



PRESS RELEASE                                             FOR IMMEDIATE RELEASE

    SANDELL ASSET MANAGEMENT CORP. ANNOUNCES SUCCESSFUL RESOLUTION OF LAWSUIT
                   AGAINST SOUTHERN UNION COMPANY (NYSE: SUG)



    SOUTHERN UNION AMENDS CONTESTED BYLAW AND ACKNOWLEDGES TIMELY SUBMISSION
               AND COMPLIANCE OF NOMINATION OF DIRECTOR CANDIDATES

NEW YORK, January 16, 2007 - Sandell Asset Management Corp. announced today that
Southern Union Company, in addition to amending its bylaws in response to
Sandell's allegations of invalidity and stockholder disenfranchisement, has
agreed in the Delaware Court of Chancery that certain provisions of its bylaws
cannot be used to challenge the timing or form of nominations submitted by
Castlerigg Master Investments Ltd., an investment fund affiliated with Sandell.

As a result of Southern Union's agreement, Castlerigg agreed to voluntarily
dismiss its pending lawsuit. This successfully resolves the litigation that
Castlerigg filed on December 5, 2006 in the Delaware Court of Chancery in which
it charged, among other things, that the director nomination provision of
Southern Union's bylaws is an unlawful entrenchment device that purports to
strip stockholders of their right under Delaware law to nominate director
candidates by providing that candidates must be approved by a committee of
incumbent directors.

"While we certainly would have preferred not to have to go to court to preserve
and enforce our rights as stockholders, we could not be more pleased with the
result. We view this as an important victory for stockholders against a company
with poor corporate governance," said Thomas E. Sandell, founder, principal and
Chief Executive Officer of Sandell Asset Management Corp. "We look forward to
presenting our slate of highly qualified independent nominees to Southern
Union's stockholders at the 2007 annual meeting."


ABOUT SANDELL ASSET MANAGEMENT CORP.

Sandell Asset Management Corp. is a multi-billion dollar global investment
management firm, founded by Thomas E. Sandell, that focuses on global corporate
events and restructurings throughout North America, Continental Europe, the
United Kingdom, Latin America and the Asia-Pacific theatres. Sandell frequently
will take an "active involvement" in facilitating financial or organizational
improvements accruing to the benefit of investors.

CONTACT: SANDELL ASSET MANAGEMENT CORP.
         THOMAS E. SANDELL
         (212) 603-5700

ADDITIONAL CONTACTS FOR INVESTORS AND ANALYSTS:
         MACKENZIE PARTNERS, INC.
         LAURIE CONNELL OR DANIEL BURCH
         (212) 929-5500
         EMAIL - SAVESUG@MACKENZIEPARTNERS.COM

STOCKHOLDERS OF SOUTHERN UNION COMPANY ARE ADVISED TO READ THE PROXY STATEMENT
AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY SANDELL ASSET
MANAGEMENT CORP. AND CERTAIN OF ITS AFFILIATES AND NOMINEES (COLLECTIVELY, THE
"PARTICIPANTS") FROM SUCH STOCKHOLDERS FOR USE AT THE 2007



ANNUAL MEETING OF STOCKHOLDERS OF SOUTHERN UNION COMPANY WHEN AND IF THEY ARE
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. WHEN AND IF
COMPLETED, A DEFINITIVE PROXY STATEMENT AND FORM OF PROXY WILL BE MAILED TO
STOCKHOLDERS OF SOUTHERN UNION COMPANY AND WILL, ALONG WITH OTHER RELEVANT
DOCUMENTS, BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S
WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING MACKENZIE PARTNERS, INC. BY
TELEPHONE AT 800-322-2885 OR BY E-MAIL AT SAVESUG@MACKENZIEPARTNERS.COM.
INFORMATION RELATING TO THE PARTICIPANTS IS CONTAINED IN EXHIBIT 2 TO THE
SCHEDULE 14A FILED BY THE PARTICIPANTS WITH THE SECURITIES AND EXCHANGE
COMMISSION ON JANUARY 16, 2007.

EX-99

                                                                      EXHIBIT 2

                                  Participants

The following persons are anticipated to be, or may be deemed to be,
participants in the intended solicitation of proxies with respect to the 2007
annual meeting of shareholders of Southern Union Company (the "Issuer") by
Sandell Asset Management Corp. and certain of its affiliates:

The Sandell Parties:

Castlerigg Master Investments Ltd., a British Virgin Islands company ("CMI");
Castlerigg International Limited, a British Virgin Islands company ("CIL");
Castlerigg International Holdings Limited, a British Virgin Islands company
("CIHL"); Castlerigg Global Select Fund, Limited, a Cayman Islands exempted
company ("CGSF"); CGS, Ltd., a Cayman Islands exempted company ("CGS");
Castlerigg GS Holdings, Ltd., a Cayman Islands exempted company ("CGSH");
Sandell Asset Management Corp., a Cayman Islands exempted company ("SAMC"); and
Thomas E. Sandell, a citizen of Sweden. The foregoing are sometimes herein
referred to collectively as the "Sandell Parties".

CIL is a private investment fund that is primarily engaged in the business of
investing in securities and other investment opportunities. CIL invests
substantially all of its assets indirectly in CMI, a master trading vehicle that
is primarily engaged in the business of investing in securities and other
investment opportunities. CIHL is the controlling shareholder of CMI and CIL is
the controlling shareholder of CIHL. CGSF is a private investment fund that is
primarily engaged in the business of investing in securities and other
investment opportunities. CGSF invests substantially all of its assets
indirectly in CGS, a master trading vehicle that is primarily engaged in the
business of investing in securities and other investment opportunities. CGSH is
the controlling shareholder of CGS and CGSF is the controlling shareholder of
CGSH. SAMC is the discretionary investment manager of CIL, CIHL, CMI, CGSF, CGSH
and CGS. Thomas E. Sandell is the controlling shareholder of SAMC and therefore
may be deemed to share the voting and dispositive power with SAMC over the
securities beneficially owned by CIL, CIHL, CMI, CGSF, CGSH and CGS.

The Nominees:

The intended nominees of CMI are Messrs. Graziano, Macey and Tilles, each of
whom is a United States citizen (collectively, the "Nominees"). The Sandell
Parties and the Nominees are sometimes herein referred to collectively as
the "Participants".

Beneficial Ownership of Common Stock and other Interests:

Each of the Participants may be deemed to be a member of a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act). However, neither the fact of
this filing nor anything contained herein shall be deemed to be an admission by
any of such parties that it is the beneficial owner of any shares of Common
Stock beneficially owned by any of the other parties, except as otherwise
disclosed herein. As of the close of business on Friday, January 12, 2007, the
Participants beneficially owned, in the aggregate, 11,751,014 shares of common
stock of the Issuer, par value $1.00 per share (the "Shares"), representing
approximately 9.8% of the Issuer's outstanding Shares (based upon the
119,638,350 Shares stated by the Issuer to be outstanding as of November 3, 2006
in the Issuer's Quarterly Report on Form 10-Q for the



quarterly period ended September 30, 2006).

CMI beneficially and directly owns and has sole voting power and sole
dispositive power with regard to 10,771,414 Shares, except to the extent that
other persons as described herein may be deemed to have shared voting power and
shared dispositive power with regard to such Shares. CGS beneficially and
directly owns and has sole voting power and sole dispositive power with regard
to 979,300 Shares, except to the extent that other persons as described herein
may be deemed to have shared voting power and shared dispositive power with
regard to such Shares. Each of CIL, CIHL, SAMC and Thomas E. Sandell, by virtue
of his or its relationships to CMI (as discussed above), may be deemed to have
shared voting power and shared dispositive power with regard to, and therefore
may be deemed to beneficially own (within the meaning of Rule 13d-3 under the
Exchange Act), the Shares that CMI directly and beneficially owns. Each of CGSF,
CGSH, SAMC and Thomas E. Sandell, by virtue of his or its relationships to CGS
(as discussed above), may be deemed to have shared voting power and shared
dispositive power with regard to, and therefore may be deemed to beneficially
own (within the meaning of Rule 13d-3 under the Exchange Act), the Shares that
CGS directly and beneficially owns. Each of SAMC and Thomas E. Sandell disclaims
beneficial ownership of such Shares for all other purposes.

Each of Nick Graziano, Jonathan R. Macey and William I. Tilles beneficially
and directly owns and has sole voting power and sole dispositive power with
regard to 100 Shares. Nick Graziano is a Managing Director of SAMC, Jonathan R.
Macey is the Sam Harris Professor of Corporate Law, Corporate Finance and
Securities Law at Yale University and William I. Tilles is a portfolio manager
and Managing Director of Global Utility Equities at SAMC.

Each of the Nominees has an interest in the anticipated solicitation of
proxies as a result of and in connection with nominee agreements pursuant to
which SAMC, on behalf of CMI, has agreed to pay the costs of soliciting proxies
in connection with the Issuer's 2007 annual meeting of shareholders, and, on its
own behalf and on behalf of CMI, to indemnify the Nominees with respect to
certain costs that may be incurred by them in connection with their nomination
as candidates for election to the board of directors of the Issuer at the annual
meeting and the solicitation of proxies in support of their election. The
Nominees will not receive any compensation from CMI or its affiliates for their
services as directors of the Issuer if elected; provided, however, that
Professor Macey will receive a fee of $50,000 from SAMC at such time as his
nomination is made or made public. If elected, the Nominees will be entitled to
such compensation from the Issuer as is consistent with the Issuer's past
practices for services of non-employee directors.

MacKenzie Partners, Inc. ("MacKenzie") is serving as an advisor and is providing
consulting and analytic services and solicitation services in connection with
the solicitation of proxies. MacKenzie does not believe that any of its
directors, officers, employees, affiliates or controlling persons, if any, is a
"participant" in this proxy solicitation. In addition, regular employees of the
Sandell Parties may assist in the solicitation of proxies and will receive no
additional consideration therefor.