Pepco Holdings Inc. and Exelon Corporation have closed a deal worth $6.8 billion post getting a green signal for the merger from the Public Service Commission of the District of Columbia.
On Wednesday, the transaction was completed, which now allows Exelon and Pepco to create the biggest power distributor in the U.S.
The regulators voted 2 to 1 in favor of the merger after both Pepco Holdings and Exelon agreed to the demands for concession made by city leaders.
The merger brings together ComEd, BGE and PECO - which are Exelon's electric and gas utilities - and Delmarva Power, Pepco and Atlantic City Electric (gas and electric utilities belonging to Pepco Holdings) to result in the creation of the biggest mid-Atlantic electric and gas utility company.
"We've made a number of commitments to customers in all of the Pepco Holdings utilities' jurisdictions - the District, Maryland, Delaware and New Jersey - and we look forward to getting to work to deliver those benefits to our customers and communities," said Chris Crane, Exelon's CEO and President.
For the unfamiliar, the merger was initially announced in April 2014. It was approved by state utility commissions, as well as the U.S. Federal Energy regulatory Commission. However, in August 2015, the Washington D.C. Public Service Commission rejected the deal.
The Commission, however, relented to reconsider its decision when Exelon pledged that it will look to increase the planned investment from $14 million to $78 million in the district. Exelon also came to an agreement with Washington agencies and Mayor Muriel Bowser on the allocation of the funds. This was inclusive of the protections for local ratepayers residing in the district.
Pepco Holdings joins the Exelon group of companies post the merger. While Pepco Holdings has 2 million customers in Delaware, Maryland, District of Columbia and New Jersey, Exelon serves 7.8 million people in Pennsylvania, Maryland and Illinois.
Exelon's CEO Chris Crane will continue to essay the same role, whereas Pepco Holdings' CEO Joseph Rigby will retire as an officer for the latter. Assuming the roles of CEO and president for Pepco Holdings is David M. Velazquez, who takes over Rigby's duties.
Pepco Holdings' Delmarva Power, Pepco and Atlantic City will stay separate entities and keep their local headquarters. Owing to the merger, the trading of Pepco Holdings' common stock on the NSE will get suspended from March 24, 2016. The shares will not be listed on the NSE anymore. Stockholders of Pepco Holdings will get $27.25 for each share they own.