Constellation Energy to Separate Merchant, Retail Operations - TheStreet

Shares of

Constellation Energy

(CEG)

rose sharply after the company disclosed plans to split its wholesale energy and power marketing business from its retail business and make

Goldman Sachs

(GS) - Get Report

an equity owner of its merchant energy business.

The company's shares recently gained $5.50, or 13.9%, to $45.13 in

New York Stock Exchange

trading.

The power company said the merchant energy business will operate as

Constellation Energy Group

. The retail energy and energy services company will be known as

BGE

. The company expects to complete the separation by mid-to-late 2001.

Additionally, Constellation said Goldman Sachs is expected to pay $250 million for up to 17.5% of the merchant energy business.

On Friday, Constellation reported lower-than-expected third-quarter earnings, citing lowered sales because of the summer's mild weather.