Exelon to Acquire John Deere's Wind Energy Unit

In a move sure to have a significant impact on Illinois energy policy, Exelon Corp. has announced plans today to acquire John Deere's wind energy business for nearly $900 million. According to the Wall Street Journal:

Exelon Corp. agreed to acquire Deere & Co.'s renewable energy unit for about $900 million as the electric power company enters the wind-power segment and the equipment manufacturer focuses on its core business.

Exelon said the acquisition, initially valued at $860 million and having a provision for Deere to get up to another $40 million once construction begins on planned projects, should add incrementally to earnings starting in 2012.

The nation's largest owner of nuclear power plants said it is already the largest marketer of wind energy east of the Mississippi, with 352 megawatts of wind-power capacity.

Deere's renewables unit includes 36 projects in eight states with a capacity to produce 735 megawatts, enough to power 160,000 to 220,000 U.S. homes, plus other projects in development. Exelon said the deal includes the opportunity to pursue 1.5 gigawatts of new projects in various stages of development, including 230 megawatts in advanced stages.

Deere said the transaction, expected to close in the fourth quarter, will result in after-tax charge of $25 million that wasn't included in its earnings estimate of $375 million for the period.

Exelon last month reported that its second-quarter profit slid 32% on increased charges and expenses, though it boosted its 2010 earnings estimate. The company has been hurt by back-to-back years of slumping demand.