Exelon, Constellation Energy Group Announce Merger

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Researched by Industrial Info Resources (Sugar Land, Texas)--Yesterday, Exelon Corporation (NYSE:EXC) (Chicago, Illinois) and Constellation Energy Group (NYSE:CEG) (Baltimore, Maryland) announced a planned merger of the two companies. Exelon will pay approximately $7.9 billion for the acquisition of Constellation.

The transaction is expected to close in the first quarter of 2012. According to a press release issued by the two companies, "The resulting company will retain the Exelon name and be headquartered in Chicago." Other parts of the company, including the companies' renewable energy businesses, will be headquartered in Baltimore. Upon closing, Exelon CEO John Rowe will retire, and Christopher Crane, Exelon's current president and chief operating officer, will become president and CEO of the company.

In a conference call regarding the merger, Rowe said, "Our valuable nuclear fleet remains a core part of the business, but the combination diversifies the generation portfolio both geographically and by fuel source. It maintains our focus on clean energy. I'd like to just add that some of the newspapers have speculated that this would revitalize Constellation's abandoned plan for a new nuclear unit. That is simply not the case. As I've said many times ... at today's gas prices, you can't build a new nuclear plant in a competitive marketplace." In October last year, Constellation announced its withdrawal from the Calvert Cliffs Unit 3 nuclear project in Maryland. For additional information, see October 15, 2010, article - Constellation Energy Exits Calvert Cliffs Unit 3, Stunning Industry and Potentially Slowing Nuclear Renaissance.

The merger will add 11,430 megawatts (MW) of generating capacity to Exelon, including 1,921 MW of nuclear capacity. The resulting company will have 34,401 MW of generating capacity, including 18,968 MW of nuclear power. The acquisition of Constellation will add approximately 5,940 of natural gas-fired generation to Exelon, raising Exelon's proportion of gas-fired generation from 11% of its generating fleet to 24%.

Industrial Info is tracking more than $3.2 billion in active capital and maintenance projects for the two companies. Exelon, which generates 67% of its power from nuclear plants, announced plans to carry on its nuclear uprate program in the company's earnings conference call on Wednesday. For information, see April 28, 2011, article - Exelon's Nuclear Uprate Program Remains on Track. Details of these uprates and other projects are available in Industrial Info's North American Power Industry Database.

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