District of Columbia Approves Exelon-Pepco Merger -- 2nd Update
March 23 2016 - 5:48PM
Dow Jones News
By Rebecca Smith
Exelon Corp.'s $6.8 billion bid to buy Pepco Holdings Inc.
cleared its final hurdle Wednesday, as regulators in the District
of Columbia approved the deal creating one of the largest publicly
traded utilities in the U.S.
Following the approval, the two utilities completed their
merger.
D.C.'s Public Service Commission, by a split vote, agreed to let
the transaction move forward after the companies modified their
merger terms to reduce the possibility of higher power prices in
future years. The regulators had previously rejected the deal,
calling it damaging to consumers, which forced the utilities to
revamp their proposal.
Regulators in other states, including Maryland, New Jersey and
Delaware, have already given the deal their blessing. The D.C. body
was the last agency needed to approve the Exelon-Pepco
combination.
Pepco shares jumped 27% to $26.93 after the approval. As part of
the deal, Pepco shareholders now will receive $27.25 per share in
cash.
The D.C. commission ultimately decided that the deal would help
electricity consumers, largely by providing a $130 million package
of benefits including measures to advance conservation, energy
efficiency and subsidizing some consumers' bills in the
district.
Charles Harak, an attorney for the National Consumer Law Center,
said the final order from D.C. provides district consumers more
benefits than some customers in other states. That could entitle
consumers in states that previously approved the deal to an
increase in their subsidy programs and other benefits.
Exelon's Mr. Elsberg said the latest regulatory action raises
the cost of the merger.
"If the merger closes, we will return to the commissions in
Delaware, Maryland and New Jersey to increase our merger packages,"
he said.
Exelon said in a news release Wednesday that it would provide a
package of direct benefits--including bill credits, reliability
improvements and other investments--worth more than $430 million
for customers and communities in Delaware, the District of
Columbia, Maryland and New Jersey.
Write to Rebecca Smith at rebecca.smith@wsj.com
(END) Dow Jones Newswires
March 23, 2016 18:33 ET (22:33 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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