Energy

Return to Article

FPL Nabs Constellation Energy

TSC Staff

FPL Group(FPL) confirmed a definitive agreement to acquire Atlantic Coast power producer Constellation Energy(CEG) for stock worth about $11 billion.

The transaction will pay Constellation holders 1.44 of an FPL share, or about $61.85 worth of stock, for each share held. Constellation shares closed Friday at $61.62 after word of the deal broke. They closed at $55.60 a week earlier.

The surviving entity, with a market capitalization of about $28 billion and annual revenue of around $27 billion, will be named Constellation Energy. FPL Group shareholders will own about 60% of the new firm, while Constellation's shareholders will own about 40%.

"Based on both companies' previously communicated earnings expectations, the transaction is expected to be accretive to both companies in the first full year of combined operations, excluding transaction and integration costs and the positive effects of purchase accounting," FPL said.

FPL is parent of Florida Power & Light. Constellation owns Baltimore Gas & Electric. Combined, the companies employ 21,750 people and serve more than 5.5 million electric customers in Florida and 625,000 gas customers in Maryland.

Get Jim Cramer's picks for 2006.