CHICAGO (

TheStreet

) --

Exelon

(EXC) - Get Exelon Corporation Report

agreed to buy rival

Constellation Energy

(CEG)

in an all-stock transaction for $38.59 a share, or $7.9 billion.

Under the agreement, Constellation's shareholders will receive 0.93 a share of Exelon in exchange for each share of Constellation common stock.

The exchange ratio represents an 18.1% premium to the 30-day average closing stock prices of Exelon and Constellation as of Wednesday, the companies said in a joint statement Thursday.

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The market capitalization of the combined company will be $34 billion, the companies said.

"This merger creates the No. 1 competitive energy provider with one of the industry's cleanest and lowest-cost power generation fleets and one of the largest commercial, industrial and residential customer bases in the United States," said Exelon Chairman and CEO John Rowe, in a statement.

Constellation shares closed Wednesday at $34.30. Shares of Exelon, the biggest operator of U.S. nuclear power plants, finished at $41.49.

Exelon, based in Chicago, owns the Illinois utility ComEd and the Pennsylvania utility PECO. Constellation, based in Baltimore, owns the Maryland utility Baltimore Gas and Electric.

-- Written by Joseph Woelfel

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