Constellation Accepts EDF Bid,
Rejects Warren Buffett Merger Offer
December 22, 2008
 For the second time in three years, an attempt by Constellation Energy Group to merge with another utility company has failed. This time, Constellation spurned Warren Buffett’s MidAmerican Energy Holdings in favor of an offer by French company EDF.
Constellation, which narrowly escaped a brush with bankruptcy when the markets started their dramatic decline in September, accepted EDF’s $4.5 billion offer for its nuclear operations. The agreement, announced Dec. 17, is structured as a joint venture with oversight by a board and an American chairman. MidAmerican’s merger offer was $4.7 billion for the entire company, which includes Baltimore Gas and Electric and nuclear power plants in Maryland and New York.
MidAmerican earned $593 million and a 10 percent ownership stake in Constellation to drop its merger plan.
The deal assures Constellation – which owns the regulated utility BGE -- will remain in Baltimore for now.
The Constellation/EDF deal will need approval from the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission and the Committee for Foreign Investments in the United States. It is unclear whether the Maryland Public Service Commission must review it too. Getting past the PSC, which oversees regulated utilities, has been the main obstacle in Constellation’s merger plans in the past.
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