U.S. utility Exelon Corporation (NYSE: EXC) today announced an agreement to acquire John Deere Renewables from its parent company Deere & Company (NYSE:DE) for $900 million.
John Deere Renewables is an operator and developer of wind power with 735 operating megawatts (MW) and an additional 230 MW in advanced stages of development.
The acquisition is valued at approximately $860 million and includes a provision for up to an additional $40 million upon completion of the in-development projects. The transaction marks Exelon’s entry into owning and operating wind projects.
Under the terms of agreement, Exelon will acquire John Deere Renewables’ 735 MW of wind capacity spread across 36 projects in eight states. Approximately 75% of the output capacity is already sold under long-term power purchase arrangements. As part of the acquisition, Exelon also has the opportunity to pursue 1,468 megawatts of new wind projects that are in various stages of development, including the 230 megawatts in advanced stages of development.
“We expect to see increasing demand for clean, efficient wind power at a national level and in the 29 states that already have a renewable energy standard,” said John W. Rowe, Exelon chairman and CEO. “This acquisition gives Exelon a strong position in the wind generation business that adds diversity to our generation fleet and provides more options for future growth.”
The acquisition will become part of the Exelon Power division of Exelon Generation, which already includes more than 1,000 MW of owned and contracted renewable power, including hydroelectricity, wind, landfill gas and solar. Before this acquisition, Exelon was already the largest wholesale marketer of wind energy east of the Mississippi, with 352 MW of wind power capacity from five wind projects in Illinois, Pennsylvania and West Virginia. Exelon Power also owns and operates a 10-MW solar plant in Chicago, the largest urban solar plant in the country.
Exelon expects to close the transaction with John Deere Renewables in 4Q10.
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