WASHINGTON - US ENERGY company Exelon has offered to buy its competitor, NRG Energy, for US$6.2 billion (S$9.16 billion) in a deal which would create a national energy giant worth about US$60 billion.
The offer represents a 37-per cent premium on the Oct 17 closing price for NRG shares.
In a letter delivered on Sunday to NRG President and chief executive office David Crane and Chairman Howard Cosgrove, Exelon proposed to acquire all of NRG's outstanding common stock in an all-stock transaction.
The proposed terms were for a fixed exchange ratio of 0.485 Exelon shares for each NRG share, which represents a value of approximately US$26.43 dollars for each share.
'We believe a combination of Exelon and NRG would represent an exceptional value for shareholders of both companies,' Mr John Rowe, chairman and CEO of Exelon, said in a statement.
'This combination would not only diversify Exelon's generation portfolio geographically, it would also create immediate earnings and cash flow accretion.'
He added that an Exelon-NRG combination would result in an enterprise valued at approximately US$60 billion dollars with a generating capacity of around 47,000 megawatts, or enough electricity to serve nearly 45 million homes.
Mr Rowe invited NRG's CEO and board of directors to join him in merger talks in order to create a more efficient company.
Chicago-based Exelon Corporation is one of the nation's largest electric utilities with nearly US$19 billion in annual revenues.
The company, which has 17,800 employees, has one of the industry's largest portfolios of electricity generation capacity, with a nationwide reach and strong positions in the Midwest and Mid-Atlantic, said company officials.
Exelon distributes electricity to approximately 5.4 million customers in northern Illinois and Pennsylvania and natural gas to 480,000 customers in the Philadelphia area. -- AFP
