Exelon Corporation (NYSE:EXC) and Pepco Holdings Inc. (NYSE:POM)
today announced that they have reached a settlement in the
proceeding before the New Jersey Board of Public Utilities (BPU) to
review the two companies’ proposed merger, which was announced on
April 30, 2014. The settlement, which is subject to the approval of
the Commissioners of the BPU, was signed and filed by Exelon and
Pepco Holdings, Atlantic City Electric (ACE), BPU staff and the
Independent Energy Producers of New Jersey.
The merger will bring together Exelon’s three electric and gas
utilities – BGE, ComEd and PECO – and Pepco Holdings’ three
electric and gas utilities – ACE, Delmarva Power and Pepco – to
create the leading mid-Atlantic electric and gas utility.
“We are pleased to have reached a settlement in New Jersey for
our merger,” said Chris Crane, Exelon president and CEO. “Our
combined company will bring significant value to New Jersey and to
ACE customers.”
“This agreement is good for New Jersey,” said Joseph M. Rigby,
PHI chairman, president and CEO. “By joining the Exelon family of
utilities, ACE will be able to deliver substantial benefits to its
customers and communities.”
The settlement includes many provisions that will ensure the
merger benefits ACE customers and New Jersey, such as:
- A $62 million Customer Investment Fund
to be used for direct rate credits to ACE customers within 60 days
of merger closing;
- A program to provide $15 million in
energy-efficiency savings to ACE customers over five years;
- Commitments to improve ACE’s
reliability performance to levels that exceed current BPU
requirements for frequency and duration of outages, and to
continued infrastructure investment;
- Commitments to hire 60 union employees
and to protect compensation and benefits;
- Maintaining ACE’s local operational
headquarters in Mays Landing, N.J.;
- Providing an annual average of
charitable contributions and local community support that is equal
to ACE’s 2013 level of at least $709,000 for 10 years after merger
closing.
In addition to the New Jersey BPU, the merger requires approvals
by the Delaware Public Service Commission, Public Service
Commission of the District of Columbia and Maryland Public Service
Commission. Following the expiration of the U.S. Department of
Justice’s review period on Dec. 22, 2014, the Hart-Scott-Rodino Act
no longer precludes completion of the merger. Exelon and PHI will
continue to work cooperatively with the DOJ until it advises them
that it has concluded its evaluation of the merger.
The transaction was approved by the Federal Energy Regulatory
Commission in November, the Virginia State Corporation Commission
in October and PHI stockholders in September. The companies expect
to complete the merger in the second or third quarter of 2015. For
more information about the merger or to download the settlement
agreement, visit www.phitomorrow.com.
About Exelon Corporation
Exelon Corporation (NYSE: EXC) is the nation’s leading
competitive energy provider, with 2013 revenues of approximately
$24.9 billion. Headquartered in Chicago, Exelon does business in 48
states, the District of Columbia and Canada. Exelon is one of the
largest competitive U.S. power generators, with more than 35,000
megawatts of owned capacity comprising one of the nation’s cleanest
and lowest-cost power generation fleets. The company’s
Constellation business unit provides energy products and services
to more than 2.5 million residential, public sector and business
customers, including more than two-thirds of the Fortune 100.
Exelon’s utilities deliver electricity and natural gas to more than
7.8 million customers in central Maryland (BGE), northern Illinois
(ComEd) and southeastern Pennsylvania (PECO). Follow Exelon on
Twitter @Exelon.
About Pepco Holdings Inc.
Pepco Holdings Inc. is one of the largest energy delivery
companies in the Mid-Atlantic region, serving about 2 million
customers in Delaware, the District of Columbia, Maryland and New
Jersey. PHI subsidiaries Pepco, Delmarva Power and Atlantic City
Electric provide regulated electricity service; Delmarva Power also
provides natural gas service. PHI also provides energy efficiency
and renewable energy services through Pepco Energy Services. For
more information, visit online: www.pepcoholdings.com.
Cautionary Statements Regarding Forward-Looking
Information
Except for the historical information contained herein, certain
of the matters discussed in this communication constitute
“forward-looking statements” within the meaning of the Securities
Act of 1933 and the Securities Exchange Act of 1934, both as
amended by the Private Securities Litigation Reform Act of 1995.
Words such as “may,” “might,” “will,” “should,” “could,”
“anticipate,” “estimate,” “expect,” “predict,” “project,” “future”,
“potential,” “intend,” “seek to,” “plan,” “assume,” “believe,”
“target,” “forecast,” “goal,” “objective,” “continue” or the
negative of such terms or other variations thereof and words and
terms of similar substance used in connection with any discussion
of future plans, actions, or events identify forward-looking
statements. These forward-looking statements include, but are not
limited to, statements regarding benefits of the proposed merger,
integration plans and expected synergies, the expected timing of
completion of the transaction, anticipated future financial and
operating performance and results, including estimates for growth.
These statements are based on the current expectations of
management of Exelon Corporation (Exelon) and Pepco Holdings, Inc.
(PHI), as applicable. There are a number of risks and uncertainties
that could cause actual results to differ materially from the
forward-looking statements included in this communication. For
example, (1) PHI may be unable to obtain shareholder approval
required for the merger; (2) the companies may be unable to
obtain regulatory approvals required for the merger, or required
regulatory approvals may delay the merger or cause the companies to
abandon the merger; (3) conditions to the closing of the
merger may not be satisfied; (4) an unsolicited offer of
another company to acquire assets or capital stock of Exelon or PHI
could interfere with the merger; (5) problems may arise in
successfully integrating the businesses of the companies, which may
result in the combined company not operating as effectively and
efficiently as expected; (6) the combined company may be
unable to achieve cost-cutting synergies or it may take longer than
expected to achieve those synergies; (7) the merger may
involve unexpected costs, unexpected liabilities or unexpected
delays, or the effects of purchase accounting may be different from
the companies’ expectations; (8) the credit ratings of the
combined company or its subsidiaries may be different from what the
companies expect; (9) the businesses of the companies may
suffer as a result of uncertainty surrounding the merger;
(10) the companies may not realize the values expected to be
obtained for properties expected or required to be sold;
(11) the industry may be subject to future regulatory or
legislative actions that could adversely affect the companies; and
(12) the companies may be adversely affected by other
economic, business, and/or competitive factors. Other unknown or
unpredictable factors could also have material adverse effects on
future results, performance or achievements of the combined
company. Therefore, forward-looking statements are not guarantees
or assurances of future performance, and actual results could
differ materially from those indicated by the forward-looking
statements. Discussions of some of these other important factors
and assumptions are contained in Exelon’s and PHI’s respective
filings with the Securities and Exchange Commission (SEC), and
available at the SEC’s website at www.sec.gov, including: (1)
Exelon’s 2013 Annual Report on Form 10-K in (a) ITEM 1A.
Risk Factors, (b) ITEM 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations and
(c) ITEM 8. Financial Statements and Supplementary Data:
Note 22; (2) Exelon’s Third Quarter 2014 Quarterly Report on Form
10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b)
Part 1, Financial Information, ITEM 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations and (c)
Part I, Financial Information, ITEM 1. Financial Statements: Note
18; (3) the definitive proxy statement that PHI filed with the SEC
on August 12, 2014 and mailed to its stockholders in connection
with the proposed merger (as supplemented by PHI’s Form 8-K filed
with the SEC on September 12, 2014); (4) PHI’s 2013 Annual
Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7.
Management’s Discussion and Analysis of Financial Condition and
Results of Operations and (c) ITEM 8. Financial Statements and
Supplementary Data: Note 15; and (5) PHI’s Third Quarter 2014
Quarterly Report on Form 10-Q in (a) PART I, ITEM 1. Financial
Statements, (b) PART I, ITEM 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations and (c)
PART II, ITEM 1A. Risk Factors. In light of these risks,
uncertainties, assumptions and factors, the forward-looking events
discussed in this communication may not occur. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this communication.
Neither Exelon nor PHI undertakes any obligation to publicly
release any revision to its forward-looking statements to reflect
events or circumstances after the date of this communication. New
factors emerge from time to time, and it is not possible for Exelon
or PHI to predict all such factors. Furthermore, it may not be
possible to assess the impact of any such factor on Exelon’s or
PHI’s respective businesses or the extent to which any factor, or
combination of factors, may cause results to differ materially from
those contained in any forward-looking statement. Any specific
factors that may be provided should not be construed as
exhaustive.
ExelonPaul Elsberg, 312-394-7417orPepco Holdings/Atlantic City
ElectricLendel Jones, 609-625-5766
Exelon (NYSE:EXC)
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