A big week for energy company mergers, buys, bankruptcies

Both stateside and internationally, big things are happening in the energy industry this week.

In just a few business days, the energy sector has seen a “practically perfect” deal between Alstom and GE, the Texas-based Energy Future Holdings filing for bankruptcy and purchase of Pepco Holdings by Exelon Corp.

This streak of merger news kicked off with the value of Alstom shares soaring. The cause? Rumors of a General Electric buy. Alstom shares climbed more than 12 percent before trading was suspended.


French President Francois Hollande was later confirmed to be a fan of the deal, and worked long hours negotiating with the CEOs of Alstom, GE and Siemens (another interested party) to protect France’s interests in the deal.

Finally, on April 30, news broke that Alstom was ready to accept GE’s bid to buy – a $17 billion deal.

Alstom’s board seemingly endorsed the offer from U.S.-based GE, but left the door open to third-party offers from Siemens or other entities.

The scope of the transaction includes the thermal power, renewable power and power grid sectors, as well as corporate and shared services.

April 29, Energy Future Holdings, the parent company of Luminant, TXU Energy and Oncor, filed for Chapter 11 bankruptcy reorganization.

The bankruptcy is not likely to impact consumers in the short-term because distribution and production will continue.

According to Moody’s, Oncor will be mostly protected from the bankruptcy “given its strong suite of ring-fence type protections.”

Still, Oncor will feel some fallout from the bankruptcy of its parent and affiliate, primarily related to its exposure to TCEH’s retail energy provider business, TXU Energy.

Meanwhile Luminant, the power generation business of EFH, is pursuing permits for several gas-fired power projects to meet possible capacity needs in the ERCOT region.

Early April 30, news broke of another big purchase. Pepco Holdings, one of the Mid-Atlantic’s most powerful utilities, would be bought by Exelon Corp., which operates in Illinois, Maryland and Philadelphia.

The deal will combine Exelon Corp.’s electric and gas utilities BGE, ComEd and PECO with Pepco’s Atlantic City Electric, Delmarva Power and its namesake utility.

The combined utility businesses will serve about 10 million customers and have a rate base of about $26 billion.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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