Constellation Energy (CEG) Enters Definitive Agreement With EDF, Terminates Deal With Buffett's MidAmerican

December 17, 2008 10:39 AM EST
Constellation Energy (NYSE: CEG) and EDF Development Inc. (a wholly owned subsidiary of EDF) today announced a definitive investment agreement under which EDF Development Inc., will acquire a 49.99 percent interest in Constellation Energy Nuclear Group, LLC, for $4.5 billion.

Constellation Energy and Warren Buffett's MidAmerican Energy Holdings announced they have jointly reached agreement to terminate their Sept. 19, 2008, merger agreement.

Under the terms of the agreement, EDF Group will also make several key investments to strengthen Constellation Energy's liquidity position:

- EDF Development Inc. is making an immediate $1 billion cash investment in Constellation Energy through the purchase of newly issued Constellation Energy Series B non-convertible cumulative preferred stock, which will be surrendered to Constellation Energy upon closing of the transaction and credited against the $4.5 billion purchase price for EDF's interest in Constellation Energy Nuclear Group.

- To provide Constellation Energy with additional liquidity support, EDF Development Inc. and Constellation Energy have entered into a two-year asset put option that allows Constellation Energy to sell to EDF up to $2 billion of non-nuclear generation assets.

- EDF Group has provided Constellation Energy a $600 million interim backstop liquidity facility, which will remain available until receipt of all regulatory approvals relating to the transfer of the non-nuclear generation assets that could be sold under the asset put option or the date that is six months after the date of the investment agreement, whichever is earlier.

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