Constellation, FPL Call Off Merger

The companies cite ongoing regulatory issues in Maryland.
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Constellation Energy

(CEG)

and

FPL Group

(FPL) - Get Report

called off their planned merger due to ongoing regulatory complications in Maryland.

The power companies said Wednesday that Baltimore-based Constellation requested to end the agreement because of the Maryland issues and the potential for a protracted battle to get the deal completed. The companies characterized the termination as amicable.

Florida-based FPL agreed to acquire Constellation in December in a stock deal valued at about $11 billion at the time of its announcement. The deal would have created an East Coast energy conglomerate.

The transaction, however, had appeared increasingly tenuous in recent months after opposition to a proposed rate increase by Constellation's Baltimore Gas & Electric unit and legislative issues related to the Maryland's Public Service Commission, which had to approve the deal.

"As we considered the situation in Maryland, we determined the risks and uncertainties were too significant to overcome," said Constellation Chairman, President and CEO Mayo Shattuck.

Shares of Constellation were trading down $3.52, or 5.6%, to $59.04. FPL shares were up 53 cents, or $1.10, to $48.70.