By Lisa Kerner
Charlotte, N.C., Dec. 17 - Électricité de France SA agreed to acquire a 49.99% interest in Constellation Energy Nuclear Group, LLC for $4.5 billion.
As a result, Constellation Energy Group, Inc. and MidAmerican Energy Holdings Co. mutually agreed to terminate their Sept. 19 merger agreement.
MidAmerican, a Des Moines energy services provider, will receive a $175 million termination fee plus $17 million of accrued dividends on series A preferred stock and a cash payout of approximately $418 million in lieu of Constellation common stock, it was reported in a form 8-K filed with the Securities and Exchange Commission.
Under its agreement with Constellation Energy, EDF Group said it will make investments to strengthen the Baltimore electricity company's liquidity position, including an immediate $1 billion cash investment through the purchase of newly issued Constellation Energy series B non-convertible cumulative preferred stock.
The preferreds will be surrendered to Constellation Energy once the merger is complete and will be credited against the $4.5 billion purchase price, according to an EDF news release.
In addition, EDF Group said it provided Constellation Energy with a $600 million interim backstop liquidity facility.
EDF Group's interest in Constellation Energy Nuclear Group will be structured as a new joint venture between the companies. Constellation Energy and EDF Group subsidiary EDF Development Inc. will each appoint five members to a new board of directors for the joint venture.
EDF Group will also have an observer seat on Constellation Energy's board and the right to designate one director to the board.
The transaction, which does not require approval by Constellation Energy shareholders, is expected to be completed within the next six to nine months, according to the release.
EDF Group, a Paris-based integrated energy company, said it will finance the acquisition using corporate funds and credit facilities.
EDF builds on partnership
Constellation Energy and EDF Development said they also entered into a two-year asset put option under which Constellation Energy may sell up to $2 billion of non-nuclear generation assets to EDF. The companies have an existing partnership in the United States to build, own and operate new nuclear generation.
EDF Group plans to move its U.S. headquarters to Maryland and will invest $36 million in the Constellation Energy Group Foundation.
"As the largest owner of nuclear plants in the world, EDF Group brings experience, scale and financial strength to Constellation Energy's future," Constellation Energy chairman, president and chief executive officer Mayo A. Shattuck III said in the release.
J.P. Morgan is advising EDF. Morgan Stanley, Rothschild, Credit Suisse and UBS Investment Bank are advising Constellation Energy.
| Acquirer: | Électricité de France SA
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| Target: | Constellation Energy Nuclear Group, LLC (49.99% interest)
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| Announcement date: | Dec. 17
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| Transaction total: | $4.5 billion
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| Expected closing: | Six to nine months
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| Stock price for target: | NYSE: CEG: $28.74 on Dec. 16
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