Exelon may acquire Pepco in 2015

Residents in Maryland may be affected by the proposed merger between Exelon and Pepco Holdings that was filed on Aug. 19. The $6.9 billion acquisition must be approved by the Maryland Public Service Commission and other state regulators before it can be finalized. Company executives claim the acquisition will improve the economic environment for the Pepco service areas located throughout the Eastern Shore and nearby Washington, D.C. An executive with Pepco stated that she expects the deal to be approved by the second or third quarter of 2015.

Baltimore Gas & Electric, an Exelon subsidiary, is not expected to be affected by the new acquisition. Pepco executives also maintained that there would not be any rate changes as a direct result of the merger. Between Potomac Electric Power servicing the Maryland-D.C. area, as well as Atlantic City Electric and Delmarva Power & Light servicing New Jersey, Pepco has approximately two million customers.

Ideally, the merger will result in an improved customer service experience, since Pepco utilities will now have access to additional crews, equipment and other Exelon materials. The additional assets may prove to be critical during storm responses or in efforts to reduce the rate of power failures. A financial consultant submitted analysis to the Public Service Commission claiming that the merger would create 7,200 more jobs and have a $623 million economic impact on the service areas.

Large-scale mergers and acquisitions between corporations may guided by general counsel. Business lawyers can be effective in helping to ensure that an executive’s vision or efforts to improve future operations do not have serious legal ramifications. Legal counsel might also help to provide safeguards and protections for new business ventures in order to try and indemnify owners or personnel from adverse legal action as much as possible.

Source: The Baltimore Sun, “State asked to approve Exelon, Pepco merger“, Arthur Hirsch, August 19, 2014

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