Exelon to acquire John Deere Renewables in $860m wind mega-deal

US utility Exelon has stepped up its push into the renewable energy sector, announcing that it has agreed to shell out $860m (£558m) to acquire John Deere Renewables, the wind energy subsidiary of engineering firm Deere & Co.

The Chicago-based company said the deal, which is expected to close before the end of the year, would give it control of 735MW of wind energy capacity, as well as a further 230MW that are in advanced stages of development.

The acquisition is valued at about $860m, but Exelon has agreed to pay an additional $40m once construction gets under way on those projects that are close to gaining final approval.

Overall, the deal will see Exelon acquire 36 wind farm projects across eight states, alongside the opportunity to pursue a further 1,468MW of projects that are in various stages of development.

The company said that about 75 per cent of John Deere's operating portfolio is already sold under long-term power purchase agreement, while Exelon chairman and chief executive John W Rowe expressed confidence that demand for wind power will continue to grow rapidly.

"We expect to see increasing demand for clean, efficient wind power at a national level and in the 29 states that already have a renewable energy standard," he said. "This acquisition gives Exelon a strong position in the wind generation business that adds diversity to our generation fleet and provides more options for future growth."

Exelon is already the largest generator of nuclear power in the US and as a result the company operates the least carbon-intensive energy generation portfolio among the country's large utilities.

The planned acquisition is the latest in a series of moves designed to curb the company's greenhouse gas emissions further and help it meet a self-imposed target of eliminating emissions equivalent to its 2001 carbon footprint by 2020.

"Not only does this acquisition add value for Exelon shareholders, providing incremental earnings in 2012 and cashflows in 2013, but it is also one more way to implement a clean energy future," said Rowe. "Whether harmful emissions are priced or regulated, our combined capacity of nearly 19,000 megawatts of zero-emission wind, solar, hydro, landfill, gas and nuclear power remains a clear competitive advantage that will only become more valuable."