Utility Exelon plans to expand its renewable energy portfolio by purchasing wind developer John Deere Renewables for $860 million.
The Chicago-based utility said the transaction marks an expansion of its wind business, and will add 735MW of US clean energy capacity to its portfolio. As part of the acquisition, Exelon can also pursue a 1,468MW pipeline of wind projects that are in various stages of development, including 230MW in advanced development.
John Deere will become part of the Exelon Power division of Exelon Generation, which includes more than 1,000MW of owned and contracted renewable power such as hydroelectricity, wind, landfill gas and solar. About 75% of John Deere’s operating portfolio is sold under long-term power purchase arrangements.
"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 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 is valued at about $860 million, with a provision for up to $40 million more after certain advanced projects are completed, and will be financed using Exelon Generation debt. The transaction is expected to close in the fourth quarter.
Barclays Capital acted as financial advisor to Exelon. Foley & Lardner served as legal advisors and McDermott Will & Emery advised on tax matters.
Moline, Illinois-based parent company Deere & Company decided to sell the renewable unit to Exelon to focus on its core equipment business, said chairman and CEO Samuel Allen.