Deere Stock Jumps on Sale of Wind Energy Business

(Story updated with comments from Exelon and share price changes)
NEW YORK (TheStreet) -- Deere(DE) has agreed to sell its wind energy business, Deere Renewables, to Exelon( EXC) subsidiary Exelon Generation Co. for $900 million.

Deere said the sale will result in an after-tax charge of about $25 million in its fourth-quarter earnings. The charge wasn't eflected in Deere's fourth-quarter earnings forecast of about $375 million, which was announced Aug. 18.

The acquisition will become part of the Exelon Power division of Exelon Generation and will be financed with Exelon Generation debts.

Exelon said the acquisition is valued at about $860 million with a provision for up to an additional $40 million upon commencement of construction on advanced development projects.

"Not only does this acquisition add value for Exelon shareholders, providing incremental earnings in 2012 and cash flows in 2013, but it also is one more way to implement a clean energy future," Exelon CEO John Rowe said in a press release.

Exelon said the transaction that will add 735 operating megawatts of clean, renewable energy to Exelon's generation portfolio, as well as an additional 230 megawatts in advanced stages of development.

Exelon expects to close the transaction with John Deere Renewables in the fourth quarter of 2010.

Shares of Deere stock have risen by 1.5% to $63.94, while Exelon shares have remained flat at $40.51.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

>To follow the writer on Twitter, go to Andrea Tse.

>To submit a news tip, send an email to: [e-mail].

Get more stock ideas and investing advice on our sister site, Stockpickr.com.

Follow TheStreet.com on Twitter and become a fan on Facebook.

Follow Andrea Tse on Twitter and become a fan on Facebook.

>To order reprints of this article, click here: Reprints