Peco Energy Co. is buying 49.9 percent of
Sithe Energies Inc.'s North American power generation businesses
for $682 million, and has an option to purchase the entire company
within five years.
The deal announced Monday is expected anticipated to close in
the fourth quarter, by which time Peco's merger with Chicago-based
Unicom Corp. is expected to be completed. The two companies are
merging to form Exelon Corp.
The Sithe power plants being purchased are primarily in
Massachusetts and New York, but also include facilities in
Pennsylvania, California, Colorado, Idaho, Canada and Mexico.
The full purchase will make Exelon one of the top generation
companies in the nation.
Corbin A. McNeill Jr., chairman, president and chief executive
of Peco, and John W. Rowe, chairman, president and chief executive
of Unicom, will become co-CEOs of Exelon, the companies said in a
"This transaction gives us the opportunity to join with one of
the country's leading merchant power developers operating a quality
fleet of assets in robust, unregulated power markets,'' the
statement said. "Combined with Exelon's existing generation
assets, this gives us a much broader and more diverse market
presence in the U.S.''
The Peco-Unicom deal, which would create a giant utility with
more than $12 billion in annual revenues, still requires approval
of the federal Nuclear Regulatory Commission and the Securities and
Exchange Commission. Those rulings are expected by the end of
September. Peco it expects about 1,200 job cuts, about 5 percent of
the work force for the combined companies, as a result of the deal.
"Sithe has assembled one of the largest portfolios of
environmentally-friendly, non-nuclear power generating facilities
and has distinguished itself as a leader in energy development,''
said William Kriegel, chairman and chief executive of Sithe. "I am
confident that Sithe and its employees will benefit from working
closely with PECO Energy, one of the country's leading energy
The deal needs to be approved by the Nuclear Regulatory
Commission, the Securities and Exchange Commission, and state
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