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FORTUNE 500 NO MORE — Baltimore loses largest company; up to 600 jobs could be eliminated

Posted By AL Forman On 'Saturday, March 10th 2012 @ 12:30 PM' @ 12:30 PM In Top Stories | No Comments

 

[1]

Artist's rendering of Constellation/Exelon Bal- timore headquarters planned for construction at bakery magnate's Harbor Point complex.

CONSTELLATION ENERGY  MERGER
INTO EXELON CORP. DUE MONDAY

Massive merged energy provider
scheduled  to  leave  downtown
for  bakery magnate Paterakis’
27-acre Harbor Point complex
 
Baltimore stands to lose up to 600 jobs, many of them high-paying, along with its last Fortune 500 company when Exelon Corp. takes over Constellation Energy Group Monday morning.

On Friday, federal regulators gave final approval to the acquisition, which sets a new standard for so-called “cross-border” utility mergers around the United States.

Constellation employs approximately 1,200 workers at its current Pratt St. headquarters downtown. Exelon said last month the newly merged firm will leave the downtown location for a massive complex at Harbor Point, [2] which it intends to build in conjunction with bakery magnate John Paterakis Sr.’s Harbor East Development Group LLC, on the former AlliedSignal site, midway between the Inner Harbor and Fells Point.

A Fortune 500 company with recent years’ revenues of over $20 billion, Constellation owns Baltimore Gas and Electric Co. (BGE) and operates more than 35 power plants in 11 states, mainly Maryland, West Virginia, Pennsylvania, New York and California.

The new firm will be headquartered in Chicago and operate utilities in Baltimore, Chicago and Philadelphia. BGE will remain headquartered in Baltimore.

Between 2007 and the present, the stock price of Constellation Energy fell from $103.78 a share to a low of $15.50 in March 2009 and a 2011 high of $40.97, closing Friday for the last time before the merger at $36.15.

GOV. O’MALLEY OPPOSED THE MERGER

The new company will be headed by Massachusetts native Mayo A. Shattuck 3rd, the Constellation CEO who was named executive chairman of Exelon in December. His salary of $5.58 million in 2010 with payouts reportedly totaling nearly $16 million drew fire from some of the largest Constellation shareholders, as well as Maryland’s General Assembly and Gov. Martin O’Malley, who opposed the Exelon/Constellation buyout.

Created in 2000 by the merger of Philadelphia and Chicago energy firms PEPCO Energy Co. and Unicom, Exelon is an electricity generating and distributing company headquartered in the Chicago Loop area, the historic commercial center of Illinois’ major city.

As of 2009, Exelon reportedly had full or majority ownership of 17 nuclear reactors in 10 nuclear power plants.

Exelon President Christopher M. Crane becomes chief executive officer and president of the new company, with Shattuck serving as executive chairman.

SHATTUCK WAS ALEX. BROWN CHAIRMAN

Before assuming Constellation’s helm in 2001, Shattuck was an investment banker and chairman of Deutsche Bank AG’s Alex. Brown unit in Baltimore. His two previous attempts to sell Constellation Energy — one of them to investor Warren Buffett’s Berkshire Hathaway Inc. — ended in failure.

As a result of Exelon’s $7.9 billion acquisition, Constellation will be replaced in Standard & Poor’s (S&P) 500 Index by Crown Castle International Corp. (CCI), a Houston-based wireless infrastructure company.

Of the top 500 American firms, Constellation was ranked No. 172 last year, down from No. 149 in 2010 and 125 in 2009. In 2011 Exelon was ranked No. 141, after being ranked No. 134 the previous two years.

It is not yet known how S&P will rank the merged Exelon/Constellation corporation.

As a condition of the merger, residential customers of BGE will receive a one-time credit of $100 on their bills.
 
— Alan Z. Forman
 
UPDATE:  READ MORE ABOUT THE CONSTELLATION/EXELON MERGER IN MONDAY’S BALTIMORE BUSINESS JOURNAL  (click here) [3]  AND CHECK OUT VoB‘s FEB. 9 COVERAGE OF THE NEW FIRM’S PLANNED CONSTRUCTION AT HARBOR POINT, WITH LINKS TO THREE BBJ STORIES  (click here). [4]
 
alforman@voiceofbaltimore.org
 


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URLs in this post:

[1] Image: http://voiceofbaltimore.org/wp-content/uploads/2012/02/Exelon-HarborPointHQ.jpg

[2] the newly merged firm will leave the downtown location for a massive complex at Harbor Point,: http://www.bizjournals.com/baltimore/news/2012/02/01/exelon-picks-harbor-point-for-new.html

[3] READ MORE ABOUT THE CONSTELLATION/EXELON MERGER IN MONDAY’S BALTIMORE BUSINESS JOURNAL  (click here): http://www.bizjournals.com/baltimore/news/2012/03/12/constellation-exelon-close-79b-merger.html

[4] VoB‘s FEB. 9 COVERAGE OF THE NEW FIRM’S PLANNED CONSTRUCTION AT HARBOR POINT, WITH LINKS TO THREE BBJ STORIES  (click here).: http://voiceofbaltimore.org/archives/2967

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