EDF Acquires Constellation’s Stake in UniStar

Électricité de France (EDF) is to acquire Constellation Energy’s 50% share in the companies’ joint venture, UniStar, for $140 million under an agreement reached on Tuesday.

The “comprehensive agreement” that restructures the companies’ partnership, giving EDF full ownership of UniStar, also eliminates the “outstanding put option.” The issue had been contentious between the two companies: Constellation had said it had the right to sell up to 12 coal, gas, and hydropower plants to EDF for a maximum of $2 billion (much more than their combined estimated market value of $400 million). The put option was set to expire at the end of the year.

In addition to sites for Calvert Cliffs 3, a nuclear reactor proposed by UniStar, EDF will acquire plans for a potential fourth reactor near Calvert Cliffs in Maryland. Constellation will also transfer to UniStar potential new nuclear sites at Nine Mile Point and R.E. Ginna in New York State.

Constellation made headlines earlier this month when it rejected the Energy Department’s loan guarantee offer of $7.6 billion. The company called the offer “unworkable” because it required a “shockingly high” credit subsidy fee of about 11.6% of the guaranteed total—or about $880 million.

“With the sale of its share of UniStar, Constellation will no longer have responsibility for developing or financing a new nuclear plant at Calvert Cliffs 3,” the Baltimore company said in a release on Tuesday.

Under the agreement, EDF will also transfer to Constellation 3.5 million of the shares it owns in Constellation and relinquish its seat on Constellation’s board. The ownership structure of the companies’ existing Constellation Energy Nuclear Group partnership remains unchanged; Constellation holds 50.01% and EDF maintains a 49.99% partner status.

Sources: EDF, Constellation Energy, POWERnews

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