“We are pleased by the decision and will continue to work closely with MidAmerican to obtain regulatory and shareholder approval of the transaction,” Mayo A. Shattuck III, CEO of Constellation Energy, said in a statement.
Constellation, parent of Baltimore Gas and Electric Co. and one of the regionÂ’s largest employers, announced its proposed sale to Iowa-based MidAmerican, a subsidiary of billionaire Warren BuffettÂ’s Berkshire Hathaway Inc., on September 18. BGE is regulated by the Maryland Public Service Commission, which on Monday began its formal review of the deal.
State and federal regulators and Constellation shareholders would need to approve the deal.
“The underlying question in this proceeding is whether the public interest is served,” said Douglas Nazarian, the PSC’s chairman. “We will find a way to make this as public and open as we can.”
The PSC review of the proposed merger could take six months, Nazarian said. He told the parties itÂ’s a schedule state regulators plan to follow.
“Discovery starts today, like now,” he said. “If there are any bumps in the road, we will work fast to have them resolved.”
The PSC could file the schedule for the reviews later this week, said LaWanda Edwards, spokeswoman for the PSC. The review would include testimony from Constellation, BGE and MidAmerican officials as well as public hearings on the proposed merger.
Constellation, which moved toward bankruptcy before striking a deal with MidAmerican, said October 31 that it will look for about $750 million more in cash to continue to stabilize its finances.
As part of its deal with Constellation, MidAmerican pumped about $1 billion in liquidity into the company in September.
“Constellation Energy continues to pursue a clear strategy to improve its liquidity position in the face of very challenging conditions in the financial and energy markets,” Greg Abel, CEO of MidAmerican, said in a statement released October 31. “We are working diligently to complete the merger, which will restore financial stability to Constellation Energy and Baltimore Gas and Electric.”