Pepco is a holding company that through its public utility subsidiaries is engaged in the transmission, distribution and default supply of electricity and the distribution and supply of natural gas. Exelon is an energy provider and holding company for several energy businesses.
Exelon will purchase Pepco in an all cash transaction consideration of $27.25 per share, or about $6.8 billion, RTT News reports.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
The merger is expected to close in the second or third quarter of 2015 and Exelon is anticipating the acquisition "to be significantly accretive" to its adjusted earnings in the first year after the closing.
Shares of Pepco are lower by 0.11% to $27.11 and Exelon stock is down 0.26% to $34.20 in early after-noon trading on Tuesday.
Separately, TheStreet Ratings team rates PEPCO HOLDINGS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PEPCO HOLDINGS INC (POM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."