Update on Acquisition and Integration of MG plc ,
 By now, most of you are aware that Enron will be acquiring London-based MG=
=20
Plc, one of the world=01,s leading metals marketers.  In connection with ou=
r=20
on-going activities relating to MG Plc, I thought it would be helpful to=20
provide you with a brief overview of on our future new metals business, to=
=20
further explain the reasons underlying the acquisition and to update you on=
=20
the integration team=01,s accomplishments to date.

What is MG Plc?
MG Plc is a leading, independent international metals trading business, whi=
ch=20
provides a variety of services to the global metals industry. The business=
=20
dates back to 1881 when it was the German Metallgesellschaft Group and was=
=20
active in trading metals from its head office in Frankfurt.  Today, MG is o=
ne=20
of the world=01,s top non-ferrous metals brokers and market makers, the wor=
ld=01,s=20
leading independent copper merchant and a leading merchant of many other=20
non-ferrous metals.

MG is comprised of two core areas of expertise, the Financial Services and=
=20
Merchanting Divisions.  The Financial Services Division was formed in 1970 =
to=20
provide market-making and trading services to the MG=01,s physical metals=
=20
trading business through futures trading as a member of the London Metal=20
Exchange and, at a later date, as a member of COMEX in New York.  In the la=
te=20
1980s, as a result of London=01,s growing leading role in the metals indust=
ry,=20
MG established a merchant trading office in London.  In 1986, MG developed=
=20
its warehousing division with the acquisition of Henry Bath.  In 1999, the=
=20
Merchanting and Financial Services Divisions, including warehousing, were=
=20
combined into a single company, which was floated on the London Stock=20
Exchange.  Currently, MG=01,s core trading offices are located in London an=
d New=20
York with warehouse operations in Liverpool, Humberside, Rotterdam, New=20
Orleans, New Haven, and Singapore. It has merchanting offices in Lima,=20
Santiago, Los Angeles, Chicago, Stockholm, Cologne, Hamburg, Frankfurt, New=
=20
Delhi, Shanghai, Beijing, Hong Kong, Seoul, Tokyo and Melbourne.

What does the Merchanting Division do?
The Merchanting Division is the world=01,s leading independent copper merch=
ant,=20
one of the top three independent merchants of copper concentrates and nicke=
l=20
and one of the leading European merchants of recycled non-ferrous metals. T=
he=20
division also trades in other non-ferrous metals on the London Metals=20
Exchange (LME), including lead, tin, zinc, aluminium and brass.

The Merchanting Division engages in the following main activities:

? Merchanting of Non-ferrous Metals =01) MG trades as a principal with prod=
ucers=20
and consumers, buying and selling non-ferrous metals and concentrates=20
(particularly copper, aluminium and nickel), exchanging qualities and=20
locations and lending and borrowing metals.
? Global Stockholding =01) MG holds stocks of non-ferrous metals at warehou=
ses=20
around the world.
? Merchanting of Recycled Metal =01) MG trades as a principal with supplier=
s and=20
consumers of non-ferrous metal for recycling.
? Terminal Market Operations =01) MG participates in the LME and COMEX usin=
g=20
hedging, arbitrage and position management to support its merchanting=20
activity.

What does the Financial Services Division do?
The Financial Services Division is one of the leading LME members and, base=
d=20
on the volume of LME metals stored, is one of the leading LME metals=20
warehousing businesses.

The Financial Services Division engages in the following main activities:

? Brokerage Activities =01) MG executes orders as a broker for clients in L=
ME=20
and COMEX contracts.
? Market-Making =01) MG is a market-maker for both futures and options cont=
racts=20
and COMEX and OTC contracts.
? Warehousing =01) MG stores metals and other goods in eleven locations in=
=20
Europe, the United States and Asia.

MG has also begun to prepare to trade non-ferrous metals using the internet=
=20
as its platform.  On 10th February, MG announced the formation of a joint=
=20
venture with Internet Capital Group, Inc. and Safeguard International Fund,=
=20
L.P. to develop an internet marketplace for trading non-ferrous metals. The=
=20
joint venture, called EMETRA, intends to establish a world-wide=20
business-to-business, e-commerce trading platform for the non-ferrous metal=
s=20
markets, including physical trading and the trading of futures and options=
=20
contracts.

Why is Enron acquiring MG?
Enron is committed to expanding its position as a global leader in wholesal=
e=20
markets. By expanding into new wholesale markets, such as non-ferrous metal=
s,=20
Enron expects to leverage its wholesale expertise and will be able to offer=
=20
customers new products and solutions to address their business needs which=
=20
link different commodities and inputs.

MG will provide Enron with a number of important benefits.  At the same tim=
e,=20
Enron expects that MG will significantly benefit from its association with=
=20
Enron.  Some of the benefits we envisage include:

? The opportunity to combine Enron=01,s core competencies in trading, finan=
ce=20
and origination with MG=01,s global position in trading non-ferrous metals.

? The ability for both Enron and MG to access new clients, particularly in=
=20
the United States and Europe.

? The ability to cross-market both existing products and new products such =
as=20
bundled products that offer combined metals and power outsourcing.

? The ability to leverage the opportunities available to MG by increasing i=
ts=20
financial strength and the resources available to it.

? The chance to overlay the EnronOnline business-model on the metals indust=
ry=20
to increase liquidity and contract market share.

What remains to be done?
Merging the business operations of two entities, even highly motivated=20
companies such as Enron and MG, has been and will continue to be a formidab=
le=20
and daunting exercise.  Having a shared vision facilitates rapid integratio=
n,=20
but there are many complicated and complex tasks that remain.  During the=
=20
conditional offer period, Enron and MG are taking steps to prepare for a=20
seamless and non-disruptive integration of our respective operations. =20
Ideally, when Enron=01,s offer to buy all MG shares becomes unconditional (=
15=20
July 2000 is the current target date), the two can hit the ground with thei=
r=20
feet running.

In the short term, a number of things must be accomplished to facilitate th=
at=20
smooth transition.  Most importantly, in order to ensure that the deal goes=
=20
forward, Enron and MG will work to remove the remaining conditions to Enron=
=01,s=20
offer, including obtaining the shareholder approvals from all shareholders =
as=20
well as obtaining relevant regulatory consents.

A number of other steps must be taken, however, during the first phase of o=
ur=20
integration timetable to ensure that everything stays on track.  Integratio=
n=20
activities will focus on four primary aspects of our operations: commercial=
=20
matters, financial matters, middle and back office issues; and, most=20
importantly, on the employees of both organisations.  Some of the most=20
important goals relating to each of these areas are:

Commercial
? Developing physical metal contracts suitable for listing on EnronOnline a=
nd=20
installing necessary communication and technology links to facilitate data=
=20
transfers and information flows between MG and Enron.
? Preparing a joint venture management plan for MG's interest in EMETRA tha=
t=20
is consistent with Enron=01,s goal of listing physical metal contracts on=
=20
EnronOnline.
? Identifying opportunities to
- combine Enron's core competencies in trading, finance, and origination wi=
th=20
MG's global position in trading non-ferrous metals;
- leverage MG=01,s position by increasing its financial strength and resour=
ces=20
available to it;
- cross-market both existing and new products to Enron and MG customers,=20
particularly in the US and Europe; and
- grow MG's metal trading franchise.

Financial
? Obtaining waivers from MG's banks in respect of change of control in loan=
=20
or other agreements.
? Preparing plans to integrate cash management functions and putting in pla=
ce=20
funding arrangements for August 2000 onwards.
? Preparing plans to arrange large-scale inventory securitisation to reduce=
=20
balance sheet debt before year-end.

Middle and Back Office
? Preparing financial information necessary to understand and maximise=20
integration benefits including, pro-forma consolidated financial statements=
;=20
profit and loss budgets for the third and fourth quarters of 2000; and=20
integration budgets.
? Determining the feasibility of integrating accounting systems (AS400, SAP=
).
? Assessing  MG's core trading and risk profiles and developing plans to=20
incorporate risk profiles in MG's metals books into Enron systems. =20
? Evaluating IT systems and infra-structure at all MG office + warehouse=20
locations and preparing budgets and programmes to provide MG staff with=20
access to Enron IT systems and applications.

People
? Preparing a programme to co-locate MG's London staff (145) at Enron House=
=20
over the weekend of 16/17 September.
? Developing plans to harmonize compensation, benefits, and employment=20
policies and practices; developing plans for staff reporting relationships.
? Communicating plans and status of activities at all levels of Enron's and=
=20
MG's organizations.
? Arranging introductions between Enron and MG staff and providing=20
opportunities for information exchanges.

Where do we go from here?
I believe that Enron=01,s acquisition of MG is an exciting opportunity for =
us=20
all.  While a number of steps remain to be taken, we have already=20
successfully begun the integration of Enron and MG.  By remaining=20
enthusiastic and committed to this process, I expect that this transition=
=20
will proceed smoothly and with a minimum of difficulty.




Summary of MG Offices/Staff Worldwide


Location=09Employee
=09Headcount=09Location=09Employee
=09=09=09Headcount
Brazil
Canada
Chicago
Chile
Edinburgh
Frankfurt
Germany
Hamburg
Hong Kong
Houston
K?ln
Lima
Liverpool
London
Los Angeles, CA
Missouri=091
=094
=096
=091
=091
=0928
=091
=0939
=091
=092
=091
=091
=0938
=09152
=0918
=093=09Moscow
=09=09NY
=09=09Peru
=09=09Rotterdam
=09=09Shanghai
=09=09Singapore
=09=09South Africa
=09=09Spain
=09=09Stockholm
=09=09Tokyo
=09=09HENRY BATH CAMBERLEY
=09=09HENRY BATH EDINBURGH
=09=09HENRY BATH LONDON
=09=09HENRY BATH MANCHESTER
=09=09HENRY BATH AVONMOUTH
=09=09LIVERPOOL =01) HB & SON=091
=09=09=0946
=09=09=091
=09=09=0929
=09=09=091
=09=09=097
=09=09=091
=09=09=091
=09=09=092
=09=09=098
=09=09=092
=09=09=091
=09=09=0910
=09=09=092
=09=09=094
=09=09=0918



For further information or queries regarding MG, please contact Eric Gadd.
Direct no:  +44 20 7783 6595
Fax no:      +44 20 7783 8314
enron.md's@enron.com