We are closely monitoring the COVID-19 pandemic, and we are here to help customers through temporary or extended financial hardship. We are suspending service disconnections and waiving new late payment fees through at least July 1. We will be working with customers on a case-by-case basis to establish payment arrangements and identify energy assistance options. We have programs to help. Learn more here.
For Immediate Release
For Immediate ReleaseJune 7, 2002
Potomac Electric Power Company (Pepco) (NYSE: POM) announced today that it expects its planned merger with Conectiv (NYSE:CIV) to close in the third quarter of 2002. The Company had previously reported that it hoped to close the merger by the end of the second quarter. Said Dennis Wraase, Pepco President and Chief Operating Officer, " We have now accomplished nearly all necessary approvals to complete the merger, and while it has taken slightly longer than we anticipated, we have every indication that the few remaining approvals will be obtained in time to close the merger in the third quarter." Approvals by regulators in New Jersey and the U.S. Securities and Exchange Commission remain to be obtained before the two companies are combined.
Pepco and Conectiv have already received approval from regulatory commissions in Delaware, the District of Columbia, Maryland, Pennsylvania and Virginia, and from the Federal Energy Regulatory Commission. Additionally, the proposed merger has been cleared by the Federal Trade Commission and the U.S. Department of Justice. In New Jersey, an Administrative Law Judge has recommended approval of a merger settlement agreement to the Board of Public Utilities.
The merger, announced Feb. 12, 2001, calls for Pepco to acquire Conectiv for a combination of cash and stock valued at approximately $2.2 billion. The new company will also assume approximately $2.8 billion of Conectiv`s outstanding debt for a total transaction value of almost $5 billion. In the merger announcement, the companies stated that the merger would be immediately accretive to earnings and earnings growth was projected in the 6 percent to 8 percent range.
Said Andrew W. Williams, Pepco Senior Vice President and Chief Financial Officer, " We remain on track to accomplish this. Of course, the later in the year the merger closes, the less impact the transaction will have on earnings in this calendar year. We still expect that Pepco will maintain its traditional earnings levels through the transition and that growth after the merger will be higher than on a stand alone basis." During the last five years, Pepco has had annual utility earnings in the $1.65 to $1.75 per share range, after eliminating all non-recurring items, with an additional 10 to 15 cents per share from unregulated subsidiaries.
The merger of Pepco, based in Washington, and Wilmington, Del.-based Conectiv will create the largest electricity delivery company in the mid-Atlantic region with a transmission and distribution network serving 1.8 million customers in a 10,000-square-mile area. The two utilities will continue operations as separate companies under a new corporate parent, Pepco Holdings, Inc., with headquarters in Washington. The combined company will generate most of its earnings from its traditional regulated utility delivery business. A smaller diversified unregulated energy portfolio is expected to enhance future growth.
Pepco (www.pepco.com) is an investor-owned company that delivers electricity to more than 700,000 customers in Washington, D.C. and the Maryland suburbs. Conectiv (www.conectiv.com) is focused on two core energy businesses. Conectiv Power Delivery provides regulated energy delivery services to more than one million customers in N.J., Del., Md., and Va. Conectiv Energy manages a growing portfolio of "mid-merit" power plants that can respond quickly to changes in the demand for power with the PJM power pool.
FORWARD-LOOKING STATEMENTS:Except for historical statements and discussions, the statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. These statements contain managements` beliefs based on information currently available to them and on various assumptions concerning future events. Forward-looking statements are not a guarantee of future performance or events. They are subject to a number of uncertainties and other factors, many of which are outside the companies` control. In connection with the transaction, additional important factors that could cause actual results to differ materially from those in the forward-looking statements herein include risks and uncertainties relating to delays in obtaining or adverse conditions contained in, related regulatory approvals, changes in economic conditions, availability and cost of capital, changes in weather patterns, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines and other presently unknown or unforeseen factors. These uncertainties and factors could cause actual results to differ materially from such statements. The companies disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results and prospects of the companies.
Point of Contact:Robert Dobkin