Filed by:  NiSource Inc.
                    Pursuant to Rule 425 under the Securities Act of 1933

                                  Subject Company:  Columbia Energy Group
                                           Commission File No:  001-01098

        On February 28, 2000, NiSource Inc. and Columbia Energy Group
   announced their proposed merger.  The following is a transcript of the
   joint press release issued on February 28, 2000:

                                PRESS RELEASE
                              FEBRUARY 28, 2000


   [NiSource Logo]                           [Columbia Energy Group Logo]

           NISOURCE AND COLUMBIA ENERGY GROUP AGREE TO COMBINATION


          Creates Leading Gas Competitor Within Key Energy Corridor

   Merrillville, IN and Herndon, VA (February 28, 2000)   NiSource Inc.
   (NYSE:NI) and Columbia Energy Group (NYSE:CG) today announced that the
   boards of directors of both companies have approved a definitive
   merger agreement under which NiSource will acquire all of the
   outstanding shares of Columbia in a transaction which values
   Columbia's common equity at approximately $6.0 billion.  NiSource will
   also assume approximately $2.5 billion in Columbia long-term debt.
   Based upon the closing market price for NiSource on February 25, 2000,
   the combined company would have an enterprise value of approximately
   $13.7 billion.

   Upon completion of the transaction, Columbia Energy Group and NiSource
   will become wholly owned subsidiaries of a new holding company.  The
   transaction will be accounted for as a purchase and is expected to be
   dilutive to NiSource's earnings per share in the first year after the
   close of the combination primarily due to transaction costs and other
   one-time charges and accretive thereafter.

   With assets stretching from the Gulf of Mexico, through the Midwest to
   the Northeast, the combined company will have a powerful platform,
   with access to 30% of the U.S. population and 40% of U.S. energy
   consumption.  The company will have over 4.1 million gas, electric,
   water and propane customers located primarily in nine states.  It
   will:

   *    Be the largest gas company east of the Rockies, based on
        customers
   *    Have the nation's second largest volume of gas sales with 911
        million cubic feet per day
   *    Have the most gas storage with 700 billion cubic feet of capacity








   TERMS:
   Under the agreement, Columbia Energy Group shareholders will receive,
   for each Columbia Energy Group share of common stock, $70 in cash plus
   a $2.60 face value SAILS{SM} (a unit consisting of a zero coupon debt
   security with a forward equity contract).  Columbia shareholders also
   have the option to elect to receive (in lieu of cash and SAILS{SM})
   new holding company stock in a tax-free exchange, for up to 30% of the
   outstanding Columbia Energy Group shares.  Under the common stock
   option, each Columbia Energy share will be exchanged for $74 in new
   holding company stock subject to a collar such that, if the average
   NiSource share price during the 30 days prior to the closing of the
   transaction is greater than $16.50, Columbia shareholders will receive
   shares of new holding company stock valued at $74 for each Columbia
   Energy Group share;  if the average NiSource share price during the 30
   days prior to closing of the transaction is $16.50 or below, Columbia
   shareholders will receive 4.4848 shares of new holding company stock
   for each Columbia Energy Group share.

   Gary L. Neale, chairman, president and chief executive officer of
   NiSource, said, "This combination creates the leading gas competitor
   within the key energy corridor between the Gulf Coast and the
   Northeast.  It will be a super-regional energy company with
   complementary market areas and no asset overlap.  Scale and geography
   are critical to success in the evolving competitive energy industry,
   and we will have the size and scope necessary to compete and win.  Our
   strategic location and breadth of assets will give us the ability to
   arbitrage BTUs across time, weather, geography and supply.  Consumer
   choice, efficiency, and new products and services such as distributed
   generation make this transaction extremely compelling for our
   shareholders, customers, employees and the communities we serve.

   "The transaction structure is designed to provide Columbia Energy
   Group shareholders with the certainty of a cash offer, while also
   recognizing the opportunity to share, on a tax-free basis, in the
   significant future value created by this super-regional combination.
   Shareholders in the combined company can expect significant growth in
   earnings per share on a going forward basis," continued Mr. Neale.

   "Our success in building our business has been predicated upon fully
   utilizing the skills and experience of the management team and
   employees present within the companies with which we have merged.  We
   are encouraged by the similarities in our corporate cultures and
   expect a smooth integration of our two companies.  We have been
   impressed with the quality of Columbia's management team.  We
   anticipate retaining key management personnel from each of the
   critical operating units and maintaining the headquarters for those
   businesses in their current locations," Mr. Neale concluded.

                                   -more-








                                   Page 2


   Oliver G. Richard III, chairman, president and chief executive officer
   of Columbia Energy Group, said, "Our Board of Directors and senior
   management fully support this transaction, which we have determined is
   in the best interest of Columbia and its shareholders. The Board
   reached this conclusion after a comprehensive evaluation of strategic
   alternatives to generate value greater than that which Columbia's
   business plan could create. We believe this merger with NiSource not
   only meets our objective of delivering superior value to Columbia's
   shareholders, but provides an opportunity for our shareholders and
   employees to participate in the growth of the combined entity. We are
   firmly committed to helping to achieve a rapid and seamless
   integration of our two companies."

   CONDITIONS:
   The merger is conditioned upon, among other things, the approvals of
   the shareholders of both companies and various regulatory commissions.
   However, if the NiSource shareholder approval is not obtained, the
   transaction will automatically be restructured so that Columbia Energy
   Group shareholders will receive $70 in cash plus a $3.02 face value
   SAILS{SM} unit of NiSource with no option for Columbia shareholders to
   elect new holding company stock.  The transaction is not subject to
   financing.  NiSource has obtained a commitment from Credit Suisse
   First Boston and Barclays Bank Plc for a bank facility in an amount
   sufficient to finance the cash portion of the purchase price.  It
   should be noted that the Federal Trade Commission raised no objection
   to a previously proposed NiSource transaction with Columbia Energy
   Group.  NiSource intends to register as a holding company with the
   Securities and Exchange Commission under the Public Utility Holding
   Company Act.  NiSource and Columbia anticipate that the transaction
   can be completed by the end of 2000.

   Credit Suisse First Boston and Wasserstein Perella & Company, Inc.
   acted as financial advisors, and Schiff Hardin & Waite, Simpson
   Thacher & Bartlett and Dewey Ballantine acted as legal counsel to
   NiSource.  Morgan Stanley Dean Witter and Salomon Smith Barney acted
   as financial advisors, and Sullivan & Cromwell acted as legal counsel
   to Columbia Energy Group.

   Columbia Energy Group, based in Herndon, Va., is one of the nation's
   leading energy services companies, with assets of approximately $7
   billion. Its operating companies engage in virtually all phases of the
   natural gas business, including exploration and production,
   transmission, storage and distribution, as well as retail energy
   marketing, propane and petroleum product sales, and electric power
   generation. Information about Columbia Energy Group (NYSE: CG - news)
   is available on the Internet at www.columbiaenergygroup.com.

                                   -more-








                                   Page 3


   NiSource Inc. is a holding company whose primary business is the
   distribution of electricity, natural gas and water in the Midwest and
   Northeast United States. The company also markets utility services and
   customer-focused resource solutions along a corridor stretching from
   Texas to Maine. Further information about the company may be found on
   the Internet at http://www.nisource.com.

        This press release contains certain 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 may 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 the 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 territories,
        fluctuations in energy-related commodity prices, conversion
        activity, other marketing efforts and other uncertainties. 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 press 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 this press release.

        NiSource and the new holding company will be filing a
        registration statement, which will contain a joint proxy
        statement/prospectus of NiSource and Columbia Energy, and other
        documents with the Securities and Exchange Commission.  Investors
        and security holders are urged to read the joint proxy
        statement/prospectus and any other relevant documents filed with
        the SEC when they become available because they will contain
        important information.  Investors and security holders will be
        able to 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 from Columbia Investor Relations
        at 13880 Dulles Corner Lane, Herndon, Virginia 20171.



                                   -more-








                                   Page 4

   NOTE TO EDITORS: TODAY'S NEWS RELEASE, ALONG WITH OTHER NEWS ABOUT
   NISOURCE AND COLUMBIA ENERGY GROUP IS AVAILABLE ON THE INTERNET AT
   www.nisource.com AND www.columbiaenergygroup.com.

   CONTACTS FOR NISOURCE:                  CONTACTS FOR COLUMBIA:
   MEDIA:                                  MEDIA:
   Maria Hibbs                             R.A. Rankin, Jr.
   (219) 647-6201                          (703) 561-6044

   INVESTORS:                              Michael Freitag
   Dennis Senchak / Rae Kozlowski          Kekst & Co.
   (219) 647-6085/(219) 647-6083           (212) 521-4896

   Barrett Godsey / Joele Frank            INVESTORS:
   Joele Frank, Wilkinson Brimmer Katcher  Thomas Hughes
   (212) 355-4449                          (703) 561-6001

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