Baltimore's Last Fortune 500 Company Moves to Chicago

Brian Hicks

Written By Brian Hicks

Posted March 12, 2012

The Federal Energy Regulatory Commission has approved the merger of Exelon (NYSE:EXC) and Constellation Energy Group, a deal worth $7.9 billion.

Exelon Corp’s acquisition of the Baltimore-based energy company gives Exelon a nationwide consumer base, with operations in 47 states, Washington D.C and Canada and makes them the second largest utility by market capitalization behind Southern Company (NYSE: SO).

Exelon Corp. said its name will stay the same and the company’s headquarters will remain in Chicago, it also plans on expanding operations significantly in prominent Constellation markets like Maryland, Illinois and Pennsylvania.

The closing of the deal ends a yearlong effort by former Constellation Chairman and CEO Mayo A. Shattuck III, who failed two prior attempts to sell the company since he assumed the mantle of CEO in 2001.

Shattuck is expected to become the executive chairman of the new company, and Exelon has pledged to build a new headquarters in Harbor point.

Shareholders of both Constellation and Exelon will receive pro-rated dividends. In order to synchronize the dividends, Constellation shareholders will receive dividends at Constellation’s rate through the day before closing and all Exelon shareholders will receive dividends at Exelon’s rate from the closing date and after.

Shareholders who hold Exelon’s common stock will be paid a pro-rated dividend equal to $0.52 per share while all shareholders of Constellation stock will receive a pro-rated dividend of $0.23 per share.

In order to secure approval from Maryland regulators and the FERC, it is estimated the two companies made $500 million of concessions in the form of cash payments, required investments, market generation restrictions, and FERC-required asset divestures.

Exelon must also give all Baltimore Gas & Electric customers a $100 bill credit thi year and deposit $113.5 into an account to serve BG&E customers during the next three years.

While Executives promised involuntary layoffs would be avoided, it is estimated as many 630 positions will be eliminated within both companies, but the brunt of the reductions will be felt most in Baltimore with many local BG&E employees likely to lose their jobs over the next two years.   

Until next time,


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