Exelon to buy Pepco Holdings Inc. for $6.83 billion

Sponsored by

CHICAGO (AP) — Energy provider Exelon is buying Pepco Holdings Inc. for $6.83 billion to create a large electric and gas utility in the Mid-Atlantic region.

The deal will combine Exelon Corp.'s electric and gas utilities BGE, ComEd and PECO with Pepco's Atlantic City Electric, Delmarva Power and its namesake utility.

The combined utility businesses will serve about 10 million customers and have a rate base of about $26 billion.

 

Under terms of the deal, Exelon will pay $27.25 per Pepco share, an 18 percent premium to the company's $23.10 closing price on Tuesday.

Shares of Pepco rose $1.51, or 6.6 percent, to $24.30 before the opening bell on Wednesday

Chicago's Exelon will put $100 million into a customer investment fund to be used across the Pepco utilities' service territories as each state public service commission feels is appropriate for customer benefits, such as rate credits, assistance for low income customers and energy efficiency measures.

Exelon President and CEO Chris Crane will serve in those roles for the combined company. Pepco Chairman, President and CEO Joseph Rigby will stay in his positions until the transaction closes. He had announced in January that he plans to retire in the first half of 2015. To help ease the transition, he'll step down as CEO near the end of this year after his successor is chosen.

The deal is expected to add to Exelon's adjusted earnings in the first full year after the acquisition is complete.

Both companies' boards unanimously approved the transaction, which is targeted to close in 2015's second or third quarter. The deal needs approval from Pepco shareholders and regulatory approvals.

Exelon also announced mixed first-quarter results on Wednesday. The company reported adjusted earnings of 62 cents per share on revenue of $7.24 billion. Analysts surveyed by FactSet predicted earnings of 69 cents per share on revenue of $6.56 billion.

Sponsored by

Get All the Electric Light & Power and POWERGRID International to Your Inbox

Subscribe to Electric Light & Power or POWERGRID International and the email newsletter today at no cost and receive the latest news and information.

Related Articles

U.S.-India consortium to advance energy independence

06/23/2017

The Department of Energy will award $7.5 million for a joint U.S.-India five-year project that will help advance the devel...

Urbanova, Avista pair on smart city pilot

06/21/2017

Pilot aims to increase energy efficiency and public safety, and garner insights into air quality

Landis+Gyr, CLP Power deliver AMI to Hong Kong

06/20/2017

Landis+Gyr's work on CLP Power’s Advanced Metering Infrastructure (AMI) platform in Hong Kong is now complete

Silver Spring Networks installs smart street lights in Jamaica

06/20/2017

Silver Spring Networks is carrying out a smart street light control program for Jamaica Public Service Co.