Thursday, September 18, 2008

Warren Buffett Buys Constellation Energy Group

Constellation Energy Group has agreed to sell to Warren Buffett's, right, MidAmerican Energy Holdings for $4.7 billion, or $26.50 per share. Constellation is the owner of Baltimore Gas and Electric Company. MidAmerican Energy Holdings is controlled by Buffett's Berkshire Hathaway, a conglomerate based in Omaha, Nebraska. The deal was unanimously approved by both companies' boards but still requires approval from shareholders and governmental officials and is expected to close within nine months.

Constellation was experiencing significant financial problems because Standard & Poors threatened to downgrade the company. In fact, recent concerns about its liquidity sent the stock down nearly 60 percent. Standard & Poor's placed Constellation's investment-grade "BBB" debt ratings on Credit Watch" developing. Who knows what effect this will have on the EdF and Constellation joint venture, Unistar Nuclear, to build an EPR nuclear reactor at the Calvert Cliffs site. (The Baltimore Sun, 9/18/08)

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