Exelon Corp has agreed to acquire Public Service Enterprise Group Inc for more than US$12 billion in stock in a transaction that would create the largest US utility, the companies said on Monday.
The combined company would serve some 7 million electric users and 2 million natural gas customers in Illinois, New Jersey and Pennsylvania.
Under the definitive agreement, each Public Service share will be converted into 1.225 shares of Exelon. The offer values Public Service at US$51.28 a share, versus its Friday closing price of US$47.27.
Company officials planned to discuss the merger on Monday afternoon in Newark. Chicago-based Exelon and Newark-based PSEG said both of their boards have approved the merger.
The new company would have US$79 billion in assets, with US$27 billion in annual revenues and US$3.2 billion in annual profit, the companies said.
The deal is expected to close in 12 to 15 months, pending approvals from regulators and shareholders.
The companies said they expect the combination will create immediate cost savings, and provide improved service because of efficiencies with generation, transmission, distribution and power marketing.