Is Exelon Buying Pepco a Move in the Right Direction?

Exelon  (NYSE: EXC  ) is already the biggest utility company in the U.S., and it has agreed to buy Pepco (NYSE: POM  ) for $6.8 billion.

But Fool contributor Tyler Crowe and energy and materials analyst Joel South say Exelon didn't make the purchase to make an even larger footprint in the utility space; it was more to diversify its holdings there. Pepco also gives Exelon stable revenue in a regulated -- and therefore less volatile -- business, even if the overall income needle won't move too much from this purchase. 

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  • Report this Comment On May 06, 2014, at 2:04 PM, foolishlycuriose wrote:

    Yes, it's called vertical integration. Good call by the management if the state regulators approve the deal.

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