425 1 0001.txt Filed by: NiSource Inc. Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Columbia Energy Group Registration Statement File No: 333-33896 On October 12, 2000, NiSource Inc. issued a press release regarding its post-merger staffing plan. The text of the press release is set forth below. TEXT OF PRESS RELEASE OCTOBER 12, 2000 FOR IMMEDIATE RELEASE FOR ADDITIONAL INFORMATION Media: Sally A. Anderson Investors: Dennis Senchak (219) 647-6203 (219) 647-6085 Local Contacts: See page 3 NISOURCE INC. ANNOUNCES POST-MERGER STAFFING PLAN; TRANSITION PROCESS BEGINS DEC. 1 MERRILLVILLE, IND. (October 12, 2000) - NiSource Inc. today announced a plan designed to increase efficiencies and eliminate redundancies following its merger with Columbia Energy Group. As part of that plan, employees have been notified that approximately 800 positions or five percent of the current combined workforce will be eliminated beginning December 1. The reductions include voluntary early retirements as well as voluntary and involuntary separations. They will be located throughout the organization geographically and at all staff levels. Employees leaving the companies involuntarily will be provided separation benefits as well as assistance in seeking new career opportunities. Pending approval by the U.S. Securities and Exchange Commission, the NiSource/Columbia merger announced Feb. 28 is expected to close on Nov. 1. The combination creates a super-regional energy powerhouse serving 3.6 million gas and electric customers in nine states, with access to 30 percent of the U.S. population representing 40 percent of the nation's energy consumption. The workforce reduction is part of a total plan projected to realize merger synergies ranging from approximately $100 million in 2001 up to $175 million in 2004, through increased revenue, consolidations, improved efficiencies and greater use of new technologies. Most of the projected savings will come from the elimination of duplicate corporate and administrative programs. The combined company plans to take a pre-tax restructuring charge in the fourth quarter 2000, primarily to cover costs related to the staff reductions and reorganization. As previously announced, the new NiSource expects to strengthen its balance sheet by nearly $1.5 billion through the sale of non-core assets. NiSource Inc. (NYSE: NI) is a holding company with headquarters in Merrillville, Ind., whose primary business is the distribution of electricity, natural gas and water in the Midwest and Northeastern United States. The company also markets utility services and customer-focused resource solutions along a corridor from Texas through Chicago to Maine. More information about the company is available on the Internet at www.nisource.com. Columbia Energy Group (NYSE: CG), based in Herndon, Va., is one of the nation's leading energy services companies. Its operating companies engage in nearly all phases of the natural gas business, including exploration and production, transmission, storage and distribution. More information about Columbia is available on the Internet at www.columbiaenergygroup.com. This release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to various risks and uncertainties. The factors that could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed herein include factors that are beyond the companies' ability to control or estimate precisely, such as estimates of future market conditions, the behavior of other market participants and the actions of federal and state regulators. Other factors include, but are not limited to, actions in the financial markets, weather conditions, economic conditions in the two companies' service territory, fluctuations in energy-related commodity prices, conversion activity, other marketing efforts and other uncertainties. These and other risk factors are detailed from time to time in the two companies' SEC reports. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The companies do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of the document. In addition to other documents filed with the Securities and Exchange Commission by the two companies, NiSource and the new holding company have filed a registration statement, which contains a joint proxy statement for NiSource and Columbia Energy Group. The final joint proxy statement/prospectus, dated April 24, 2000, is available and has been distributed to the companies' shareholders. Investors and security holders are urged to read the joint proxy statement/prospectus and other relevant documents filed with the SEC because they contain important information. Investors and security holders may receive the joint proxy statement/prospectus and other documents free of charge at the SEC's Web site, www.sec.gov, from NiSource Investor Relations at 801 East 86th Avenue, Merrillville, Indiana 46410 or at its Web site, www.nisource.com, or from Columbia Investor Relations at 13880 Dulles Corner Lane, Herndon, Virginia 20171 or at its Web site, www.columbiaenergygroup.com. LOCAL CONTACTS State Contact Person Telephone No. ----- -------------- ------------- West Virginia Karl Brack 304-357-2396 Indiana Regina Biddings 219-647-6204 Virginia Laura Bateman 804-323-5357 Kentucky Lisa Smith 859-288-0245 Ohio Steve Jablonski 614-460-4605 Pennsylvania/Maryland Rob Boulware 412-572-7136 Texas Bob Kiser 713-267-4180 Massachusetts/Maine/ New Hampshire Carol Churchill 508-836-7370 # # #