MOLINE, Ill. (AP) — Deere & Co. will sell its wind energy business to a subsidiary of Exelon Corp. for $900 million, the company said Tuesday, potentially signaling an active merger and acquisition period ahead for the power industry.
With energy prices persistently low due to a grinding economic recovery, stakes in the power industry have begun to shift.
Earlier this month, Blackstone Group paid $542.7 million to take Houston’s Dynergy Inc. private. In a three-way deal, Dynergy also sold four power plants to NRG Energy Inc. for $1.36 billion in cash.
Deere said in February it was reviewing options for John Deere Renewables. It has invested $1 billion over the past five years in the financing, development and ownership of wind energy projects.
On Tuesday, Deere said the deal will allow it to get back to what it does best, which is manufacturing farm equipment.
But the wind business is new to Exelon as well. Exelon is a giant in the nuclear power business.
The subsidiary Exelon Generation Co. is snapping up 352 megawatts of power from five wind projects in Illinois, Pennsylvania and West Virginia.
The deal comes during a challenging time for the wind power industry in particular. Government stimulus money that helped expand capacity last year is running out. While many states have adopted standards requiring that a certain amount of energy come from renewable sources, Congress has yet to enact a nationwide standard.
Wind advocates say that is why wind has not reached its potential.
Exelon, however, is will positioned to ride out the economic downturn and potentially capitalize on alternative energy assets in the future.
The company reported profits of $2.7 billion last year.
“Whether harmful emissions are priced or regulated, our combined capacity of nearly 19,000 megawatts of zero-emission wind, solar, hydro, landfill gas and nuclear power remains a clear competitive advantage that will only become more valuable,” said Exelon Chairman and CEO John Rowe.
Exelon expects the acquisition to add to earnings in 2012 and to cash flows in 2013. It is funding the deal with Exelon Generation debt.
The business includes 36 completed projects in eight states with an operational capacity of 735 megawatts.
Deere said it will record a $25 million after-tax charge in the fourth-quarter. The sale was not reflected in the company’s $375 million fourth-quarter earnings estimate from earlier this month.
The transaction is expected to close by the end of the year.
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Tazzy
Posted on September 3, 2010 at 10:40pmIn Tulsa Oklahoma , we have been without highways lights due to money woes .
Report Post »A big fan blade in the sky that produced enough electric to see to drive at night would have been better then pitch black roads and accidents .
I think they can put one in my back yard any time !
Newtie and the Beauty
Posted on September 2, 2010 at 11:27pmThe people who want wind energy, but adopt a NIMBY (Not In My Back Yard) attitude better get off the fence–either they want it or they don’t. Many decisions require a trade-off.
Report Post »SamAdams25
Posted on September 14, 2010 at 11:15pmThis is a perfect example of the hypocrisy of the rabid greenies and the libs. They want to force this “green energy” agenda on America, yet it’s the rabid greenies who oppose any construction of anything, worrying about the habitat of some tiny insect or disease-ridden rodent. As long as the EPA continues to be swayed by the radical envoros, nothing can be built, yet they still want to kill the coal industry and domestic oil and gas production. This will either make us more dependent on foreign oil, or cut our energy supply. This will cripple industry, kill millions more jobs, and lower the American standard of living.
There is no doubt that if you value your freedom and liberty, you must become active in ridding our government of “progressives” (socialists) who only care about their power and control over our lives.
Report Post »Lunar
Posted on September 1, 2010 at 3:11amAgreeing with thinker
Wind advocates say that is why wind has not reached its potential.
NO the reason it’s not at potential is because there huge union BS tied up in setting these things up and the rich left dont want the view of the big houses messed up with a windfarm. Wind power doesnt do so well in a flat farm prarie. It loves coastal areas and rolling hills to cause thermals. All of where people who big houses live it seems.
Hmmm we can have fatcats living in houses that spend money to block the windfarm near them. OR Get rid of them and have the windfarm.
Or this just occurred to me, whats his face the rich Turner guy has HUGE plots of land set away to protect it for the future children blocking all oil and gas exploration in whats a VERY rich area. Build a wind farm THERE. Make it better for all of us in the future, if your not just a bunch of liars.
Report Post »Thinker4Life
Posted on August 31, 2010 at 11:33pmIt angers me that Scandia wasn‘t allowed to build wind turbines in the great lakes simply because the lakeshore residents didn’t want to mess up their veiw miles out “So They Say”… The company even said they would allow people to dock their boats right up to the winfarms.. Imagine sitting on you’re boat and BBQing under a monster windmill How Cool would that be…. I say we revote state wide for yes or no to winfarms……..
Report Post »Martintech
Posted on August 31, 2010 at 10:30pmDeere is making a wise move–get out while the gettin’s good!
Report Post »RIGHTone
Posted on August 31, 2010 at 10:24pmHillary accused Obama of making “backroom deals” with the Chicago-based Exelon company when he was a Illinois state lawmaker. I am sure that Exelon is poised to get the ‘green’ contracts with the government.
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