The warning signs came months ago.
Baltimore-based Constellation Energy and Florida-based FPL Group have finally killed their planned merger-citing “continued uncertainty over regulatory and judicial matters in Maryland.”
The two companies stated that the proposed nearly $11 billion deal faced a “protracted and open-ended merger review process.”
Executives with the two utility companies submitted filings with the Maryland Public Service Commission Wednesday.
“This is to advise the commission that FPL Group, and Constellation Energy have reached a joint and amicable agreement to terminate their plans to merge,” stated a letter to the commission signed by company executives.
The utility companies had announced in December plans to merge. After the Maryland General Assembly approved legislation this summer addressing the merger and a planned rate hike, the companies submitted amended merger plans in July.
The merger was in jeopardy months ago ? the victim of public outcry over a planned 72 percent rate hike by Constellation subsidiary Baltimore Gas and Electric.
The rate hike and planned merger became a political issue within the Maryland General Assembly earlier this year. The General Assembly approved legislation aimed at reducing the impact of the rate hike and preventing the sitting commission from considering the merger.
Wall Street investors reacted mildly in trading Wednesday. The share price of Constellation Energy slipped less than 1 percent to close at $62.37 per share from $62.56 per share at Tuesday’s close of trading.
The share price of FPL Group actually rose 1.6 percent on Wednesday to close at $49.77 per share from $48.17 per share at the close of trading Tuesday.
When the stock price doesn?t move much after a major announcement about a merger, it usually indicates Wall Street investors weren?t surprised and thus didn?t try to dump the stock.
“Constellation Energy has an exceptionally strong stand-alone strategy, and we look forward to executing our business plan and continuing to deliver robust returns to shareholders,” said Constellation Chief Executive Officer Mayo Shattuck III.
Indeed, even Gov. Robert Ehrlich said the deal?s demise was a long time coming.
“It?s no surprise to anyone,” Ehrlich told reporters during an unrelated press conference in Baltimore.
[email protected] Examiner Staff Writer Jamie Marlarkey contributed to this report.
