Diversified utility company, Exelon Corporation (EXC) announced that its subsidiary, Constellation, has completed the acquisition of Integrys Energy Services, Inc., a subsidiary of Integrys Energy Group, Inc. (TEG).
Benefits of the Transaction
Integrys Energy Services has a presence in 14 electric markets, 16 gas markets and 7 combined electric and gas markets. The company has a handsome customer base spread across 22 states in the Midwest, Mid-Atlantic, Northeast and the District of Columbia. Integrys’ vast geographical footprint fits tactically into Constellation’s growth and expansion plans. The combined entity will serve in excess of 2.5 million residential and business customers in United States.
The strategic deal has boosted Constellation’s power load by 15 terawatt-hours (TWh) and natural gas load by 150 billion cubic feet (bcf) annually in various markets, making its presence competitively stronger in those regions.
The transaction will particularly expand Constellation’s gas business in its targeted growth areas. Moreover, Exelon has a generation business in the regions where Integrys serves its power customers. This overlap will help the acquirer in matching the load served with its owned generation assets in those provinces.
Transitioning of Integrys Energy Services into Constellation is expected to begin in a month’s time.
Snapshot of Other Deals
An inorganic growth strategy seems to be quite widespread in the utility sector. Exelon has earlier announced its proposed acquisition of Pepco Holdings Inc. (POM), one of the largest energy delivery companies in the Mid-Atlantic region. Exelon will invest nearly $7 billion to acquire Pepco Holdings. The company aims to close the deal in the second half of 2015 (read: Exelon Corp. to Acquire Pepco, Expand in Mid-Atlantic).
In another transaction, a premier diversified utility, Wisconsin Energy Corp. (WEC) inked a definitive agreement with Integrys Energy Group, to acquire the latter for a total consideration of $9.1 billion. Wisconsin Energy expects to close the deal in the summer of 2015 upon all the necessary approvals (read: Wisconsin Energy to Buy Integrys to Expand Midwest Operations).
Zacks Rank
Exelon Corporation currently carries a Zacks Rank #3 (Hold).
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