U.S. Department of Justice clears way for Exelon-Constellation merger

Source: Exelon Corporation

The U.S. Department of Justice (DOJ) has cleared the way for the merger of Exelon Corporation (NYSE: EXC) and Constellation Energy (NYSE:CEG), in connection with its review of the transaction under the Hart-Scott-Rodino Act.

The DOJ’s Antitrust Division filed court papers seeking approval by the U.S. District Court for the District of Columbia with regard to the merger. These papers detail the conditions agreed to by DOJ and Exelon and Constellation for the companies to merge. Upon the court’s order adopting the proposed conditions, Exelon and Constellation will be free to close the transaction, pending any other regulatory approvals required.

Consistent with Exelon’s merger application to the Federal Energy Regulatory Commission (FERC), in these papers, the company makes a number of commitments to mitigate market power concerns, including: divestiture of certain assets, granting DOJ the right to approve the buyers of those assets, assurances about how the merged company will bid its units into the PJM markets pending divestiture, and deadlines for the sale of those assets.

“With DOJ’s action, we are pleased to have reached yet another important milestone in completing our merger with Constellation,” said Exelon President and COO Christopher M. Crane. “We continue to expect that we will finalize the merger in early 2012.”

“Our proposed merger has cleared two state regulators and the shareholders of both companies, and now the Department of Justice has cleared the way for the transaction,” said Constellation Chairman and CEO Mayo A. Shattuck III. “We’ve made considerable progress toward closing the merger and will continue working to move the process forward as smoothly as possible.”

The merger has been approved by the New York Public Service Commission, the Public Utility Commission of Texas and shareholders of Exelon and Constellation. It also requires regulatory approvals by FERC, the Nuclear Regulatory Commission and the Maryland Public Service Commission.

In a merger settlement with the State of Maryland, the Maryland Energy Administration (MEA), the City of Baltimore and the Baltimore Building and Construction Trades Council announced Dec. 15, Exelon, Constellation and Baltimore Gas and Electric Company agreed to provide a package of benefits totaling more than $1 billion and expected to create more than 6,000 jobs in Maryland.

The Exelon-Constellation merger will combine Exelon’s environmentally advantaged generation fleet with Constellation Energy’s industry-leading customer-facing businesses. The companies announced their agreement to merge on April 28.

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