Exelon Buys John Deere’s Wind Biz
Deere & Company, the he world’s largest farm-equipment maker, has agreed to sell its John Deere Renewables wind energy business to Chicago-based power company Exelon for $900 million.
Barclays Capital acted as financial advisor to Exelon. Foley & Lardner served as legal advisor and McDermott Will & Emery advised for certain tax matters.
With the John Deere acquisition Exelon is buying 36 completed projects generating 735 megawatts of power. Exelon is also getting its hand on a 1,468 megawatts project pipeline, including 230 megawatts in advanced stages of development.
Currently Exelon’s renewable energy unit, Exelon Power, controls 352 megawatts of wind power capacity generated from five wind projects in Illinois, Pennsylvania and West Virginia. It also owns and operates a 10-megawatt solar plant in Chicago. With this latest acquisition Exelon controls 1,067 megawatts in wind power capacity.
The deal is interesting because it defies current M&A trends in renewable energy which has seen small developers with thin balance sheets acquired by much larger companies. In this case the transaction involves two large, cash-rich companies.
Deere & Company CEO Samuel Allen said:
As Deere sharpens its own strategic focus, we have concluded that the company’s resources are best invested in growing our core equipment businesses around the world. We have chosen to place the wind portfolio with Exelon in part due to its demonstrated leadership in the energy industry.
Deere anticipates the transaction to close within the 2010 calendar year.