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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 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 Richard 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.Last modified on 4 July 2012, at 16:53