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Exelon Lights Up Trading

Exelon Lights Up Trading

Exelon Corp., a big new kid on the electricity block, is expected to begin trading today on the New York Stock Exchange under the symbol "EXC." The new company is the product of the $8 billion merger of Unicom Corp. and PECO Energy Co. which was completed on Friday, following approval by the Securities and Exchange Commission.

The merger creates one of the largest U.S. electric utilities, with more than $12 billion in annual revenues and nearly five million customers in the Chicago and Philadelphia areas (see NGI, April 17). Exelon also will be one of the largest power generators in the United States, with the largest nuclear power capacity.

"We believe Exelon will be the start of something special, a new breed of utility service company, tailor-made for today's competitive power environment," said Corbin McNeill Jr., PECO's CEO who is now Exelon's chairman and co-CEO. Through the transition period, he will oversee Exelon Generation.

"Deregulation is creating unprecedented opportunities for power generators," said John W. Rowe, Unicom chair and now president and co-CEO of Exelon. "The winners in this new landscape will be merchants that best meet the needs of PECO Energy and Unicom, and we believe Exelon will be extraordinarily well positioned to become a merchant of choice." Rowe will oversee Exelon Energy Delivery and Exelon Enterprises through the transition.

McNeill will be chair through the first half of the transition, and Rowe will be chair for the second half, which goes through 2003. Beginning Jan. 1, 2004, Rowe becomes chair and sole CEO of Exelon, and McNeill remains on the board of directors.

Exelon will have one of the largest portfolios of electric generation capacity and will market power in customized packages for specific needs, said Rowe, "wherever and whenever they need it."

In a statement, Rowe and McNeill said that the Exelon merger is expected to realize annual cost savings of about $100 million next year, which will increase to $180 million by 2003. The merger also will add to earnings in 2001, its first full year of operation.

Exelon's market capitalization is expected to total about $18 billion, with 318 million share outstanding. PECO shareholders will receive one Exelon share for every share they own, while Unicom shareholders will receive 0.875 shares of Exelon common stock and $3 in cash for each of their shares.

During merger negotiations, PECO agreed to cut its rates by $200 million over four years, keep nearly all of the jobs at its Philadelphia headquarters and maintain its charitable contributions for the next three years. About 78% of Unicom shareholders approved of the plan, while 97% of PECO shareholders voted in favor. The company will be headquartered in Chicago.

Carolyn Davis, Houston

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