EDF Group acquires controlling stake in US nuclear giant Constellation Energy

18 December 2008

The French national utility, the EDF Group, will acquire a 49.9 per cent stake in a major American nuclear operator, Constellation Energy. EDF Group, which includes Éléctricité de France, will buy the stake in the nuclear operations of Constellation Energy, the parent company of Baltimore Gas and Electric, for $4.5 billion.

EDF, already Constellation's largest shareholder, will receive a 49.9% stake in Constellation's five nuclear reactors, which together represent 3.7% of the nuclear energy output in the US.

Constellation will now recommend the deal to its shareholders in place of a proposed merger with Warren Buffet's MidAmerican Energy Holdings. Interestingly, EDF's offer for half the nuclear assets is almost as much as MidAmerican offered for the whole company.

Constellation and EDF are already joint venture partners in the construction of several nuclear reactors in the United States. EDF is the largest nuclear operator in the world, running 58 reactors which owe their origin to American designs.

The agreement will include an option for Electricite de France to pick up Constellation's non-nuclear power generation assets for another $2.0 billion, and also make an immediate $1.0 billion cash investment in Constellation Energy.

In September this year, when it teetered on the brink of bankruptcy, Constellation's board agreed to an offer of $4.7 billion for the entire company from MidAmerican. But earlier this month, EDF offered as much as $6.5 billion for nearly half of the nuclear business and other assets.