InterNorth

InterNorth Inc. was an American energy company whose principal business was the transportation and distribution of natural gas through an extensive pipeline network. Based in Omaha, Nebraska, the company developed from Northern Natural Gas Company, established in 1931, and became one of the most significant natural-gas infrastructure businesses in North America. At its height, its pipeline system extended for approximately 36,000 miles, making it the largest natural-gas pipeline operation in North America according to the cited historical account. The business broadened beyond pipeline transportation over several decades. Its corporate portfolio included Northern Liquid Fuels Company, Northern Petrochemicals Company, Northern Propane Gas Company, Northern Border Pipeline Company, and People's Natural Gas. InterNorth also participated in plastics, petrochemicals, coal, and petroleum exploration and production. This diversification reflected the strategy of a large integrated energy holding company rather than a narrowly focused pipeline utility. In March 1980, Northern Natural Gas reorganized as a holding company and adopted the InterNorth name. The reorganization gave the company a broader corporate identity while preserving Northern Natural Gas as its most important operating asset. During the early 1980s, InterNorth pursued expansion through acquisitions and unsolicited takeover activity. It made an unsuccessful bid for Crouse-Hinds Company in 1980–81 and acquired Belco Petroleum Company in 1983, adding a substantial oil-exploration and development business founded by Arthur Belfer. InterNorth's defining strategic decision came in 1985, when it agreed to acquire Houston Natural Gas Company. The transaction was intended in part to protect InterNorth from becoming an acquisition target and was associated with the use of a poison-pill strategy. The deal was widely viewed by some observers as expensive and ultimately altered the balance of power within the combined company. Although the original concept contemplated dual headquarters in Omaha and Houston and leadership by InterNorth chief executive Samuel Segnar, the combined business soon became headquartered in Houston and was led by Houston Natural Gas chief executive Ken Lay. For roughly nine months after the transaction, the company operated under the name HNG/InterNorth. In April 1986, it was renamed Enron Corp. The change ended InterNorth as an independent corporate identity, but the former Northern Natural Gas pipeline business remained a central asset of the successor company and later continued under separate ownership. The InterNorth story is therefore principally a history of a major American energy infrastructure company and of the merger that created the corporate predecessor of Enron, rather than the history of a consumer-facing product brand.

InterNorth originated in 1931 as Northern Natural Gas Company, an American natural-gas enterprise that eventually became the foundation of a much broader energy holding company. Its core activity was the movement and distribution of natural gas through pipelines. Over time, the company assembled related subsidiaries and businesses, including Northern Liquid Fuels Company, Northern Petrochemicals Company, Northern Propane Gas Company, Northern Border Pipeline Company, and People's Natural Gas. It also expanded into plastics, petrochemicals, coal, and petroleum exploration and production. The scale of Northern Natural Gas's infrastructure made it strategically important. The company operated approximately 36,000 miles of pipeline, described in the cited account as the largest natural-gas pipeline network in North America. This infrastructure gave the business a substantial position in the continent's gas industry and provided the platform for later diversification. In March 1980, Northern Natural Gas reorganized as a holding company and adopted the name InterNorth. The new structure and name reflected the breadth of its operations beyond the original pipeline business. InterNorth subsequently pursued an assertive expansion program. In 1980 and 1981, it made an unsolicited attempt to acquire Crouse-Hinds Company. The effort failed, and Crouse-Hinds was ultimately acquired by Cooper Industries in 1982. InterNorth continued looking for growth opportunities and in 1983 acquired Belco Petroleum Company, a major oil-exploration and development business founded by Arthur Belfer. The decisive turning point came in 1985, when InterNorth agreed to purchase the smaller Houston Natural Gas Company. The transaction was regarded by some observers as overpriced and was associated with a defensive effort to prevent InterNorth from becoming an acquisition target. In this sense, the acquisition was intended to secure independence, but it also shifted control of the combined enterprise. Plans initially contemplated dual headquarters in Omaha and Houston, with InterNorth chief executive Samuel Segnar retaining control. In practice, the company soon operated entirely from Houston and was led by Houston Natural Gas chief executive Ken Lay. The combined company was temporarily called HNG/InterNorth. During the naming process, a proposed name, Enteron, was rejected after its medical meaning became apparent. The company then settled on Enron, and in April 1986 HNG/InterNorth was renamed Enron Corp. This ended InterNorth's independent existence and established the corporate structure that later became associated with Enron. The transition also generated governance controversy. The cited historical material states that, after the merger, corporate raider Irwin Jacobs targeted the combined company. It further alleges that Ken Lay used more than $400 million from an employee stock ownership program to repurchase Jacobs's shares and address other financial losses, after which the program was frozen for seven years except for retirement or death benefits. These events belong to the early history of the successor company rather than to a separate consumer-brand scandal involving InterNorth, but they are relevant to understanding the corporate legacy of the merger. Northern Natural Gas remained the most valuable asset inherited from InterNorth. After Enron entered bankruptcy, Northern Natural Gas briefly became part of Dynegy and was later sold to Berkshire Hathaway, which moved the business back to Omaha. InterNorth therefore survives historically as the predecessor company whose pipeline-centered operations supplied the principal infrastructure base for Enron and whose corporate transformation illustrates the consequences of a defensive energy-sector merger.

• 1986

  InterNorth becomes Enron

  [1]InterNorthen.wikipedia.org

  After a short period as HNG/InterNorth, the combined company adopts the Enron name in April.

• 1985

  Houston Natural Gas acquisition is agreed

  [1]InterNorthen.wikipedia.org

  InterNorth agrees to acquire Houston Natural Gas in a defensive transaction that changes the combined company's management and center of operations.

• 1983

  Belco Petroleum is acquired

  [1]InterNorthen.wikipedia.org

  InterNorth expands its petroleum exploration and development activities through the purchase of Belco Petroleum Company.

• 1980

  Northern Natural Gas reorganizes as InterNorth

  [1]InterNorthen.wikipedia.org

  A holding-company reorganization introduces the InterNorth name and supports a wider portfolio of energy-related businesses.

• 1931

  Northern Natural Gas Company is established

  [1]InterNorthen.wikipedia.org

  The company that later became InterNorth begins as Northern Natural Gas Company, focused on natural-gas infrastructure and distribution.

A diversified American energy holding company anchored by one of North America's largest natural-gas pipeline networks.

• Natural-gas infrastructure

  Northern Natural Gas pipeline system

  InterNorth's principal asset was the Northern Natural Gas pipeline and distribution system. The network extended for approximately 36,000 miles and was described as the largest natural-gas pipeline system in North America. It provided the operating and financial foundation of the company and remained the most valuable InterNorth-derived asset after the transition to Enron.

• Natural-gas infrastructure

  Northern Border Pipeline

  Northern Border Pipeline Company was among the pipeline-related subsidiaries associated with InterNorth. Its inclusion reflected the company's strategy of building a broad natural-gas transportation portfolio rather than relying on a single operating corridor.

• Petroleum exploration and production · 1983

  Belco petroleum operations

  The acquisition of Belco Petroleum added oil exploration and development to InterNorth's portfolio. Belco was a substantial petroleum company founded by Arthur Belfer, and its purchase represented InterNorth's effort to diversify beyond regulated and infrastructure-oriented gas activities.

• Energy and industrial materials

  Petrochemical, plastics, propane, and liquid-fuels businesses

  Through subsidiaries and related operations, InterNorth participated in petrochemicals, plastics, propane, and liquid fuels. These activities complemented its pipeline business and positioned the company as a diversified energy group with exposure to both infrastructure and commodity-related markets.

• 1987

  Employee stock ownership plan share repurchase controversy

  Historical accounts of the successor company state that Ken Lay used more than $400 million from an employee stock ownership program to repurchase shares held by corporate raider Irwin Jacobs and address other losses. The account also states that the plan was subsequently frozen for seven years except for retirement or death benefits. This episode occurred after the InterNorth–Houston Natural Gas combination and is relevant to InterNorth's corporate legacy.

  Source

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• 1986

  Rename the combined company EnronStrategy

  Background

  The merged business initially used the temporary name HNG/InterNorth and considered other naming options.

  Action taken

  In April 1986, the company adopted the name Enron Corp.

  Aftermath

  InterNorth ceased to exist as an independent corporate identity, becoming part of the corporate lineage of Enron.

  Source

• 1985

  Acquire Houston Natural Gas as a defensive transactionM&A

  Background

  InterNorth was described as an arbitrage target and sought a transaction that would help preserve its independence. Some observers considered the proposed acquisition expensive.

  Action taken

  InterNorth agreed to acquire Houston Natural Gas Company, using the transaction in part as a defensive measure.

  Aftermath

  The merger shifted the center of power to Houston, placed Ken Lay in charge, and led to the eventual Enron name. The planned dual-headquarters arrangement was not maintained.

  Source

• 1983

  Acquire Belco PetroleumM&A

  Background

  InterNorth was continuing to diversify into petroleum exploration and development.

  Action taken

  The company purchased Belco Petroleum Company.

  Aftermath

  The acquisition expanded InterNorth's upstream petroleum presence and added a major oil-sector business to its portfolio.

  Source

• 1980

  Reorganize as a diversified holding companyStrategy

  Background

  Northern Natural Gas had expanded into multiple energy and industrial businesses, making its original operating-company name less representative of the full portfolio.

  Action taken

  The company reorganized in March 1980 and adopted the InterNorth name.

  Aftermath

  InterNorth operated as a broader energy holding company while retaining Northern Natural Gas as its central pipeline business.

  Source

• 1980

  Pursue Crouse-Hinds through an unsolicited bidM&A

  Background

  InterNorth sought additional expansion opportunities outside its established natural-gas infrastructure operations.

  Action taken

  It launched an unsolicited takeover bid for Crouse-Hinds Company during 1980–81.

  Aftermath

  The bid did not succeed, and Cooper Industries acquired Crouse-Hinds in 1982.

  Source

1. 1InterNorthen.wikipedia.org