UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
October 19, 2000
(Date of earliest
event reported)
PECO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-1401 23-0970240
(State or other (SEC (IRS Employer
jurisdiction of file number) Identification
incorporation) Number)
230l Market Street, Philadelphia, Pennsylvania 19101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(215) 841-4000
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Item 5. Other Events.
On October 19, 2000, PECO Energy Company issued the following announcement:
[Unicom Corporation Logo] [PECO Energy Company Logo]
NEWS RELEASE
From: Unicom Corporation and PECO Energy FOR IMMEDIATE RELEASE
Corporate Communications ---------------------
P.O. Box 767 October 19, 2000
Chicago, IL 60690-0767
Contact: Don Kirchoffner
312.394.3001
UNICOM AND PECO ENERGY MERGER RECEIVES FINAL APPROVAL FROM SEC; THE TWO
COMPANIES EXPECT TO COMPLETE MERGER ON OCTOBER 20; NEWLY MERGED
EXELON CORPORATION EXPECTED TO BEGIN PUBLIC TRADING ON OCTOBER 23
-- The combined strengths of Unicom and PECO Energy will make
Exelon one of the nation's largest electric utilities, with 5 million
customers and one of the industry's largest portfolios of electricity
generation capacity--
Chicago and Philadelphia (October 19, 2000) Unicom Corporation (NYSE: UCM) and
PECO Energy Company (NYSE: PE) today announced that they have received approval
from the Securities and Exchange Commission to complete their merger to form
Exelon Corporation. The two companies expect to complete their merger on October
20. They expect to begin trading as Exelon Corporation (NYSE: EXC) the morning
of October 23 on the New York Stock Exchange (NYSE) under the ticker symbol EXC.
Exelon will also be listed on the Chicago and Philadelphia stock exchanges. The
merger of Unicom and PECO Energy will create Exelon, one of the nation's largest
electric utilities, with approximately five million customers and more than $12
billion in annual revenues. Exelon will be headquartered in Chicago, with energy
delivery operations in Illinois and Pennsylvania, and expanding generation
capabilities with strong positions in the Midwest and Mid-Atlantic.
The total market capitalization for Exelon is expected to be approximately $19
billion. Unicom shareholders will receive 0.875 shares of Exelon common stock
and $3.00 in cash for each of their shares of Unicom common stock. PECO Energy
shareholders will receive one share of Exelon common stock for each share they
own of PECO Energy common stock. Exelon will have approximately 318 million
shares of common stock outstanding.
"The new Exelon will create value for customers, employees and shareholders,"
said Corbin A. McNeill, Jr., who will become Exelon's chairman and co-chief
executive officer. "Customers will gain the benefits of our combined resources
and best practices, employees will have greater opportunities for career growth,
and shareholders will be invested in an industry leader with uncommon upside
opportunities. Our new management team has a proven track record in maximizing
the value of opportunities, and we have already begun to cultivate the value of
Exelon's five million customer base, its substantial portfolio of electric
generation capacity, low-cost distribution and rapid growth in businesses.
Exelon's potential is compelling and our success in the integration process has
been very encouraging."
(more)
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page 2
John W. Rowe, who will become Exelon's co-chief executive officer and president,
noted, "Exelon will be well-positioned to grow earnings. We have three business
segments, with aggressive leaders who will set new benchmarks in their
respective markets. Exelon Generation will be Exelon's primary growth driver,
building growth through a nationwide network and strong positions in the Midwest
and Mid-Atlantic, which are experiencing robust demand for power. Exelon Energy
Delivery will provide a strong foundation of earnings and cash flow through its
electric and gas distribution, and Exelon Enterprises has the potential to
contribute substantial growth in the future as it continues to build its energy,
infrastructure services, energy services and telecommunications businesses."
Rowe commented on Exelon's progress in bringing the two companies together. "The
integration planning process has been completed and we are progressing according
to plan. During the year-long integration process, utilization of nuclear
capacity increased to more than 90%, the Chicago delivery system was
significantly upgraded, $1.5 billion in common stock was repurchased, and the
regulatory approval process was completed. In addition, there were several key
acquisitions, including three nuclear plants, ten infrastructure companies,
three mechanical contractors and entering an agreement to acquire an interest in
Sithe's power generation assets. It takes a lot of teamwork to make all that
happen in such a short time, especially during a merger integration. The Exelon
company being created is much stronger than the two predecessor companies were a
year ago. The assets are stronger, the operations are more productive and the
people are exceeding our expectations. We're already delivering value to the
shareholders."
McNeill addressed Exelon's position in the new era of deregulation. "We believe
Exelon will be the start of something special, a new breed of utility services
company, tailor-made for today's competitive power environment. Deregulation is
creating unprecedented opportunities for power generators. The winners in this
new landscape will be merchants that best meet the needs of the customer, and
after years of building our generation capabilities at both PECO Energy and
Unicom, we believe Exelon will be extraordinarily well-positioned to become a
merchant of choice.
"We will have one of the largest portfolios of electric generation capacity and
the ability to market power in customized packages that meet the specific needs
of our customers, wherever and whenever they need it, and with unbeatable
reliability. Moreover, Exelon Generation will be an asset-backed generation
business, and increasingly, we find that customers recognize the importance of
the ability to actually deliver the power to their door. We will bring the best
of both worlds to our customers - the marketing and the power - we're a perfect
fit to be a winner in this new environment."
Three Business Segments
The two leaders pointed to significant competitive strengths in each of Exelon's
business segments:
o Exelon Generation
- One of the industry's largest portfolios of electricity generation
capacity
- The nation's largest low-cost nuclear fleet, which reduces Exelon's
energy generation costs
- Among the industry's lowest-cost energy producers, with plans to
reduce costs further
- An expanding footprint with strong positions in the Midwest and
Mid-Atlantic
- Nationwide asset-based power marketing, enabling Exelon to maximize
its portfolio value
(more)
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page 3
o Exelon Energy Delivery
- One of the industry's largest customer bases with 5 million customers
- Operations in Illinois and Pennsylvania, both of which have been
through deregulation
- Serves two of the nation's largest metropolitan areas
o Exelon Enterprises
- Capitalizes on Exelon's core competencies in energy and infrastructure
services nationwide
- Exelon Infrastructure Services has grown to $700 million in annualized
revenues in one year
- Substantial holdings in telecommunications with fiber and wireless
networks in Philadelphia
Financial
Exelon is expected to realize annual cost savings from the merger of
approximately $100 million in 2001, increasing to approximately $180 million by
2003. Management expects the merger to be immediately accretive to earnings in
2001, the first full year of operation.
Exelon is expected to pay an initial annual dividend of $1.69 per share.
Exelon will begin its operations with a strong balance sheet. During the past
year, Unicom and PECO Energy have repurchased a total of $1.5 billion in common
stock in advance of the merger.
The Management Team
Exelon's management team will be led by Corbin McNeill and John Rowe, who will
continue to work together as co-chief executive officers of Exelon for a
transition period through December 31, 2003. During the first half of the
transition period, McNeill will be chairman; Rowe will become chairman in the
second half. At the end of the transition period, Rowe will become chairman and
sole CEO of Exelon, and McNeill will remain on the Board of Directors. The
following details the responsibilities of the senior management team:
o Corbin A. McNeill, Jr. - Chairman and co-CEO, Exelon Corporation: will
oversee Exelon Generation
o John W. Rowe - Co-CEO and President, Exelon Corporation: will oversee
Exelon Energy Delivery and Exelon Enterprises
o Michael J. Egan - Executive VP, Exelon Corporation; President, Exelon
Enterprises
o Oliver D. Kingsley, Jr. - Executive VP, Exelon Corporation; President &
Chief Nuclear Officer, Exelon Nuclear
o Pamela B. Strobel - Executive VP, Exelon Corporation; President, Exelon
Energy Delivery; Vice Chair, ComEd Distribution
o Carl J. Croskey - Senior VP, Exelon Corporation; President, ComEd
Distribution
o Ruth Ann M. Gillis - Senior VP and Chief Financial Officer, Exelon
Corporation
o Kenneth G. Lawrence - Senior VP, Exelon Corporation; President, PECO
Distribution
o Ian P. McLean - Senior VP, Exelon Corporation; President, Power Team
o Elizabeth Ann Moler - Senior VP Governmental Affairs & Policy, Exelon
Corporation
o Honorio J. Padron - Senior VP, Exelon Corporation; President, Exelon
Business Services
o S. Gary Snodgrass - Senior VP & Chief Human Resources Officer, Exelon
Corporation
(more)
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page 4
The Board of Directors
Exelon's Board of Directors will include:
o Edward A. Brennan - Retired Chairman and CEO of Sears, Roebuck and Co.
o Carlos H. Cantu - Retired President and CEO of The ServiceMaster Company
o Daniel L. Cooper - Retired Admiral, former Vice President and General
Manager, Nuclear Services Division of Gilbert/Commonwealth, Inc.
o M. Walter D'Alessio - Chairman, President and CEO of Legg Mason Real Estate
Services
o G. Fred DiBona, Jr. - President and CEO of Independence Blue Cross
o Bruce DeMars - Retired Admiral, Vice President and Secretary of DeMars,
Inc.; Partner, Trident Merchant Group
o Sue L. Gin - Chairman and CEO of Flying Food Group, Inc.
o Richard H. Glanton - Partner, law firm of Reed Smith Shaw & McClay, LLP
o Rosemarie B. Greco - Principal of GRECO Ventures, former President of
CoreStates Financial Corporation
o Edgar D. Jannotta - Senior Director of William Blair & Company, LLC
o Corbin A. McNeill, Jr. - Chairman and co-CEO of Exelon Corporation
o John H. Palms, Ph.D. - President of the University of South Carolina,
Professor of Physics
o John W. Rogers, Jr. - President of Ariel Capital Management, Inc.
o John W. Rowe - Co-CEO and President of Exelon Corporation
o Ronald Rubin - CEO of The Pennsylvania Real Estate Investment Trust
o Richard L. Thomas - Retired Chairman of First Chicago NBD Corporation
Exelon Corporation will be one of the nation's largest electric utilities with
business segments in energy generation, energy delivery and unregulated
enterprises. The company will have one of the industry's largest portfolios of
electricity generation capacity, with a nationwide reach and strong positions in
the Midwest and Mid-Atlantic. Exelon will distribute electricity and gas to
approximately five million customers in Illinois and Pennsylvania. The company
also will have holdings in such competitive businesses as energy, infrastructure
services, energy services and telecommunications. Exelon will be headquartered
in Chicago and will trade on the NYSE under the ticker EXC. Exelon will also be
listed on the Chicago and Philadelphia stock exchanges.
###
This press release contains certain forward-looking statements within the
meaning of the safe-harbor provisions of the Securities Exchange Act of 1934;
these forward-looking statements are subject to various risks and uncertainties.
The factors that could cause actual results to differ materially from the
projections, forecasts, estimates and expectations discussed herein may include
factors that are beyond the companies' ability to control or estimate precisely,
such as estimates of future market conditions, the behavior of other market
participants and the actions of the Federal and State regulators. Other factors
include, but are not limited to, actions in the financial markets, weather
conditions, economic conditions in the companies' service territories,
fluctuations in energy-related commodity prices, conversion activity, other
marketing efforts and other uncertainties. Other risk factors are detailed from
time to time in the companies' SEC reports. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this press release. The companies do not undertake any obligation to
publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this press release.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PECO ENERGY COMPANY
/S/ Jean H. Gibson
---------------------------
Vice President & Controller
October 20, 2000
