Exelon and Pepco Holdings to Join Forces
On May 30, Exelon Corporation filed an application with the Federal Energy Regulatory Commission (FERC) to acquire Pepco Holdings. Approval will allow Exelon Corporation, the leading nuclear operator in the US, to attain Pepco Holdings for $6.8 billion in cash. Bloomberg reports that this deal will “create the biggest electric and natural gas utility in the Mid-Atlantic region.”
The acquisition will combine Exelon’s electric and gas utilities (BGE, ComEd, and PECO) with Pepco Holdings’ utilities (Atlantic City Electric, Delmarva Power, and Pepco).
Based in Chicago, Exelon will gain two million customers, which will further expand its business into the eastern US. “Exelon and Pepco Holdings have a compelling strategic rationale for merging, given our geographic proximity and similar utility business models,” stated Chris Crane, Exelon CEO.
Since Pepco Holdings owns a small amount of electricity generation, no competition issues are predicted. Additionally, the transaction will not create any adverse side-effects on customers’ rates.
The companies are requesting that FERC review the application and issue an order with 90 days. Closing is anticipated for the second or third quarter of 2015.
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