BANGALORE (Reuters) - Power company Exelon Corp
Continue Reading Below
On Wednesday, Reuters had reported that Exelon was near to striking a deal with Constellation.
Exelon, among the leading U.S. utilities and the nation's top nuclear power company, will add 1.2 million customers to its existing 5.4 million. The combined company will serve Maryland, Illinois and Pennsylvania.
About 55 percent of the new entity's power generation fleets will be nuclear, 24 percent natural gas and 8 percent renewable and hydro.
The U.S. Environmental Protection Agency has proposed a 3-year schedule for power plants to comply with new pollution rules, but some executives have said that's not enough time for companies to adjust to the complex regulations.
"This enterprise will have the scale and financial strength to drive expansion in competitive energy markets, as well as new investment in the next wave of clean generation and sustainable products and services," said Constellation CEO Mayo Shattuck.
Constellation shareholders will receive 0.93 Exelon shares for each share they hold, the companies said in a statement.
The offer is worth about $38.59 a share -- 12.5 percent more than Constellation stock's Wednesday close of $34.30.
Following completion, Exelon shareholders will own about 78 percent of the combined company, which will be based in Chicago, and should add to Exelon's 2013 earnings by more than 5 percent.
Constellation will add 12,000 megawatts (MW) of generating capacity to Exelon's nearly 32,000 MW.
Exelon CEO John Rowe will retire after the deal closes early next year. Exelon Chief Operating Officer Christopher Crane will become the new company's CEO, with Shattuck as executive chairman.
The deal needs to be approved by shareholders of both companies, the Federal Energy Regulatory Commission, Nuclear Regulatory Commission and the public service commissions of Maryland and New York, as well other regulatory bodies.
Barclays Capital, J.P. Morgan Securities, Evercore Partners and Loop Capital Markets were financial advisers to Exelon, and
(Reporting by Krishna N Das in Bangalore; Editing by Joyjeet Das, Saumyadeb Chakrabarty and Ian Geoghegan)