Chicago-based Exelon Corporation and Pepco Holdings Inc., headquartered in Mays Landing, announced Wednesday that they have signed an agreement to combine the two companies in an all-cash transaction.
According to the announcement, the agreement combines Exelon’s three top-performing electric and gas utilities – BGE, ComEd and PECO – and Pepco’s electric and gas utilities – Atlantic City Electric, Delmarva Power and Pepco. The acquisition, the companies said, will create the leading mid-Atlantic electric and gas utility.
The transaction is supported by $7.2 billion bridge facility with Barclays and Goldman Sachs. Exelon said it expects the financing to include a combination of Exelon equity issuance, long-term debt and corporate cash.
“This combination provides significant benefits for all of our stakeholders, including customers, employees and shareholders,” said Joseph M. Rigby, chairman, president and CEO of Pepco. “As part of this transaction, Exelon has committed to provide what our customers most want: investments in infrastructure improvements, continuation of our long tradition of philanthropy in our communities and direct customer benefits of $100 million.”
Upon completion of the transaction, the companies said Exelon will provide an aggregate $100 million – equivalent to approximately $50 per customer – for a Customer Investment Fund for customer benefits such has rate credits, assistance for low income customers and energy efficiency measures.
Exelon President and CEO Chris Crane will remain in his position. Rigby, who previously announced his planned retirement, will remain in his roles until the closing of the deal.
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