Exelon to become wind farm operator in $900m deal

August 31, 2010

The largest operator of nuclear power stations in the US has made a move into owning and operating its first wind farms.

Chicago-based Exelon Corporation has put pen to paper on a $900 million deal to snap up John Deere Renewables, the wind development arm of Deer & Company.

Through its Exelon Generating Company subsidiary, it will be taking on 36 completed wind farms in eight states, boasting an operational capacity of 735 megawatts.

The debt-financed deal, which will see a $860 million upfront transaction and a further $40 million payable on completion of 230MW of wind farms currently in “advanced development”, could be concluded by the end of the 2010 calendar year.

Exelon said it was already the “least carbon-intensive” of the large US electric utilities, thanks to its nuclear fleet and 1,000MW of contracted or owned hydropower, solar and landfill gas capacity, as well as its contracted wind capacity.

The company hailed the Deere deal as marking its entry into owning and operating wind projects.

“Increasing demand”

John W. Rowe, Exelon chairman and CEO, said: “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,” Rowe said. “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.”

Along with the operational and advanced development stage wind projects, the John Deere acquisition will offer a further 1,238MW of wind projects in various stages of development.

Deere & Company, which has its HQ in Moline, Illinois, has been looking for a buyer for its business since launching a review back in February, following a tough 2009 and predictions of a weak 2010 performance.

The company, which has its core business in agricultural equipment,

“As Deere sharpens its own strategic focus, we have concluded that the company’s resources are best invested in growing our core equipment businesses around the world,” said Samuel R. Allen, Deere & Company chairman and chief executive officer today.

“We have chosen to place the wind portfolio with Exelon in part due to its demonstrated leadership in the energy industry.”

Exelon’s advisers in the deal included Barclays Capital, Foley & Lardner and McDermott Will & Emery.