"The proposed sale stems from several changes in the marketplaceand in our business plans in recent years," Arledge says. The finalsigning hinges on due diligence and regulatory approvals, but isexpected to close by year's end along with the planned merger.

Specifically, Coastal's subsidiary, Coastal Mart Inc. has agreedto sell 103 company-operated outlets in New Jersey, Pennsylvania,Virginia, West Virginia, Tennessee, North Carolina and SouthCarolina, and 150 contract dealer accounts in the East. Coastalplans to hold onto its northeast-branded jobber marketing program,which covers more than 500 locations in 15 Mid-Atlantic andnortheastern states.

Coastal Mart will continue to hold 1,250 company-owned andjobber stores. Coastal employees will get job offers or severancepackages with the change-over. The energy holding company hasconsolidated assets of $16 billion and subsidiary operations in theenergy industry.