PHILADELPHIA — 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 joint statement.

"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 companies.''

The deal needs to be approved by the Nuclear Regulatory Commission, the Securities and Exchange Commission, and state regulatory proceedings.

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