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Exelon to acquire Constellation Energy in $7.9bn all-share deal

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Exelon Corp (NYSE:EXC) said Thursday that it has agreed to buy Constellation Energy (NYSE:CEG) in a $7.9 billion all-stock transaction, creating a company with a combined market cap of $34 billion.

Exelon is one of the US' largest electric utilities, with more than $18 billion in annual revenues. The company, with 32,000 MW of generating capacity, provides electricity to approximately 5.4 million customers in northern Illinois and southeastern Pennsylvania, and natural gas to approximately 490,000 customers in the Philadelphia area.

Under the terms of the deal, Constellation shareholders will receive 0.93 shares of Exelon common stock in exchange for each share of Constellation, equating to a value of $38.59 per Constellation share.

The price represents a 12.5% premium to Constellation's closing share price yesterday.

Following the close of the transaction, Exelon shareholders will own roughly 78% of the new company, which will retain the Exelon name with its base in Chicago, and Constellation stockholders will hold 22%.

"This merger creates the number one competitive energy provider with one of the industry's cleanest and lowest-cost power generation fleets and one of the largest commercial, industrial and residential customer bases in the United States," said Exelon chairman and CEO, John W. Rowe.

Constellation owns a diversified fleet of generating units, totaling approximately 12,000 megawatts of generating capacity, and provides electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. The company had revenues of $14.3 billion in 2010.

The merged company will have about 35,000 commercial and industrial customers, and million of households through retail and wholesale sales, across 38 states in the US, the District of Columbia, and the two Canadian provinces of Alberta and Ontario.

Exelon said the deal is expected to be break-even to Exelon's adjusted earnings in 2012, and is anticipated to add to profits in 2013 by more than 5%. The company's current president and COO, M. Crane, will become the president and CEO of the new entity, while Rowe will retire.

The transaction remains subject to both shareholder and regulatory approvals.



Quick facts: Exelon

Price: 41.01 USD

NYSE:EXC
Market: NYSE
Market Cap: $39.95 billion
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