Exelon closes $7.9B deal for Constellation Energy

AP News
Posted: Mar 12, 2012 5:13 PM
Exelon closes $7.9B deal for Constellation Energy

Exelon Corp. said Monday that it has completed its $7.9 billion takeover of Constellation Energy, creating one of the largest competitive power suppliers in the United States.

With the completion of the deal on Monday, Christopher Crane, who previously served as Exelon's president and chief operating officer, became the combined company's president and CEO. And Mayo Shattuck III, Constellation's president and chief executive, was named executive chairman.

Separately, Constellation disclosed that it agreed to pay $245 million to settle with the Federal Energy Regulatory Commission over certain trades in New York wholesale energy markets in 2007 and 2008.

Constellation said in a statement that a settlement was in its best interest and did not admit any wrongdoing in the case.

In connection with the Constellation buyout, Exelon Corp. said it will retain its name and its base in Chicago, with significant operations in Maryland, Illinois and Pennsylvania. Constellation Energy shares will cease trading before Tuesday's market opening.

The addition of Baltimore-based Constellation gives Exelon a coast-to-coast presence with about 6.6 million customers and operations in 47 states, Washington, D.C., and Canada.

The two companies are combining operations immediately. The deal has been approved by the shareholders of both companies and all of the required regulators.

As part of the settlement with the government, Constellation said it will pay a $135 million civil penalty and another $110 million in disgorgement. As part of the disgorgement, Constellation will provide $1 million each to six U.S. regional grid operators to help them improve their surveillance and analytic capabilities.

The remaining money will be deposited into a fund that state agencies in New York, New England and PJM, the regional grid operator for 13 states and Washington, D.C., will be eligible to make claims against.

Exelon shares rose 90 cents, or 2.3 percent, to close at $39.81, while Constellation shares rose $1.08, or 3 percent, to $37.23.