Baltimore power company Constellation Energy Group — one of the state’s largest businesses and the parent of utility Baltimore Gas and Electric Co. — will keep its headquarters and jobs in Maryland, the head of Constellation’s potential new owner said Monday.
“When it is a regulated business, we believe a utility business should be a local business and has to be run by local management,” Gregory E. Abel, president and CEO of MidAmerican Energy Holdings, said.
Forced by a liquidity crisis that saw its stock price plunge by more than 50 percent last week, Constellation agreed to be purchased for $4.7 billion by MidAmerican, which is controlled by billionaire investor Warren Buffett. Local business leaders feared that the sale would lead to fewer Constellation jobs in the state.
With nearly 10,000 employees, Constellation is one of the largest private employers in Maryland.
Executives with EDF International, a subsidiary of French energy giant EDF Group, offered Constellation $6.2 billion in a buyout proposal with private equity companies Kohlberg Kravis Roberts & Co. and TPG Capital. EDF Group owns almost 10 percent of Constellation’s shares, according to EDF.
“EDFI, as a shareholder, believes that the MidAmerican transaction does not generate value creation expected by shareholders,” executives said. “EDFI remains committed to pursuing opportunities in the U.S. nuclear industry and is reviewing all of its options with respect to increasing the value of its investment in Constellation for itself and Constellation’s other shareholders.”
Constellation CEO and president Mayo A. Shattuck III said the MidAmerican bid was the best one available and is more likely to win approval from federal and state regulators.
Abel praised EDF, which is involved with Constellation in the UniStar Nuclear Energy joint venture that hopes to build a new nuclear reactor at the Calvert Cliffs Nuclear Power Plant in southern Maryland.
Abel said he expected to gain regulatory approval for the Constellation purchase within a year.
“We’re comfortable with the various approval processes in front of us,” Abel said.
The agreement has been approved by both companies’ boards but requires shareholder and federal and state regulatory approval from agencies that include the Maryland Public Service Commission.
Tags: Maryland Jobs