Constellation Energy, MidAmerican Energy reach tentative agreement to combine

By Lisa Kerner

Charlotte, N.C., Sept. 18 - MidAmerican Energy Holdings Co. tentatively agreed to acquire Constellation Energy Group Inc. for approximately $4.7 billion, or $26.50 per share.

Both companies' boards of directors approved the tentative agreement.

MidAmerican Energy and Constellation Energy said they expect to enter into a definitive merger agreement by the close of business on Friday.

The agreement would include a $175 million termination fee payable to MidAmerican Energy by Constellation Energy, it was reported in a form 8-K filed with the Securities and Exchange Commission.

According to Constellation Energy, it will issue $1 billion of preferred equity yielding 8% to MidAmerican Energy once a definitive merger agreement is signed.

The transaction is expected to close within nine months, a Constellation Energy news release said.

"We intend, as with all of our investments, to allow Constellation Energy to operate autonomously as it pursues its long-term goals," MidAmerican Energy president and chief executive officer Gregory E. Abel said in the release.

"Joining forces with Constellation Energy accelerates our strategic initiative to develop and build energy infrastructure assets in North America," Abel added.

Constellation Energy, a Baltimore energy products provider, was advised by Morgan Stanley and UBS Investment Bank.

MidAmerican Energy is also an energy services provider. The company is located in Des Moines.

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