BALTIMORE, June 13, 2002 — Constellation Energy Group and AES announced they have reached an agreement under which Constellation will purchase AES’s subsidiary, AES NewEnergy Inc., a national provider of electricity, natural gas, and energy services, serving 4,000 MWs of load associated with large commercial and industrial customers in competitive energy markets including the Northeast, Mid-Atlantic, Midwest, Texas and California.
Under terms of the agreement, Constellation will acquire 100 percent ownership of NewEnergy for $240 million, which includes $64 million for the cash balance of the company. Constellation expects the acquisition to be accretive to earnings. The transaction is expected to close before year-end.
The purchase is subject to approval by the Federal Energy Regulatory Commission and approval under the Hart-Scott-Rodino Act.
Mayo A. Shattuck III, Constellation Energy Group President and Chief Executive Officer, said: “We are excited about this transaction, which expands our reach across the energy value chain. NewEnergy’s success in providing energy to a significant number of large commercial and industrial customers will complement Constellation’s existing merchant energy business in deregulated regions.”
Clem Palevich, President of AES NewEnergy, said: “We look forward to joining the Constellation Energy Group family of companies. Like Constellation, NewEnergy’s experienced, innovative approach to energy markets and superior customer service set it apart from other energy service companies. We look forward to building on NewEnergy’s existing profitability as we grow and provide value and stability to an increasing customer base. Our customers include manufacturing and industrial companies, state and federal government, schools and universities, retailers and commercial real estate businesses, as well as health providers and financial institutions.”
A Fortune 500 Company based in Baltimore, Constellation Energy Group (NYSE: CEG) owns energy related businesses, including a North American wholesale power marketing and merchant generation business and the Baltimore Gas and Electric Company (BGE), a regulated energy delivery company in Central Maryland. Constellation currently serves wholesale customers including distribution utilities, co-ops, municipalities and other large load-serving companies that operate in deregulated energy markets. BGE provides service to more than 1.1 million electric customers and approximately 600,000 natural gas customers. A 2002 J.D. Power and Associates study ranked BGE as having the Highest Customer Satisfaction with Midsize Business Electric Service in the Eastern US. At year-end 2001, Constellation Energy Group reported revenues of $3.9 billion and assets of $14.1 billion.