Exhibit No. 99.2
Summary of Strategic Alliance between
Constellation Energy Group and Goldman Sachs
Financial Summary
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Goldman Sachs will make an equity contribution of $250 million and certain
assets related to the power marketing and trading business in exchange for up to
a 17.5% interest in Constellation Energy Group's merchant energy business.
Constellation Energy's merchant energy business currently includes the fossil,
nuclear and other electric generating assets of Constellation Energy Group,
domestic energy projects under development, and the power marketing and trading
business.
Goldman Sachs employees currently working with the power marketing and trading
business will be offered direct employment with Constellation, and Goldman Sachs
will cease being paid fees for their assistance in day-to-day operations of this
business.
Goldman Sachs' investment will represent its exclusive power business platform
in North America.
Goldman Sachs will also receive warrants for 13% of the shares of Constellation
Energy's merchant energy business. These warrants are exercisable at $60 per
share beginning 6 months after the separation of the merchant energy business.
Goldman Sachs may sell all or part of its shares in the merchant energy business
at the later of 6 months after the separation or December 31, 2002.
Goldman Sachs may not compete against the merchant energy business prior to
October 31, 2003.
Two-Stage Process in Mid to Late 2001
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Stage 1 - Equity investment by Goldman Sachs in Constellation Energy's
merchant energy business.
Stage 2 - Complete separation of the merchant energy business from the
"pipes and wires" company and various other subsidiaries. The end
result is two publicly-traded corporations:
Constellation Energy Group Parent of merchant energy business
BGE Corp. Parent of Baltimore Gas and Electric
and all other subsidiaries
