A change in the boardroom was the news item giving some pep to Constellation Energy (CEG 0.87%) stock on Monday. The company's shares crawled up by nearly 1% in price as a reaction, slightly outpacing the benchmark S&P 500 index on the day.
A new face on the board
Before market open this morning Constellation announced the election of Alan Armstrong, a seasoned energy industry veteran, to its board of directors. He will take his seat on Jan. 1 of next year.
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Within the industry Armstrong is known for his 14-year tenure as CEO at energy conglomerate Williams; these days he is the executive chairman of that company's board. Prior to becoming CEO, Armstrong was a longtime employee, having started there in 1986 as an engineer.
Constellation Chairman Robert Lawless said Armstrong's "deep industry knowledge and leadership will be invaluable as we integrate America's largest natural gas portfolio into our generation fleet through our deal with Calpine."
On the hook for a big buy
The deal Lawless referred to is Constellation's agreement to purchase privately held power company Calpine in a transaction worth a net $26.6 billion. This will include a cash-and-stock payment of around $16.4 billion, which in turn will be formed of $4.5 billion in cash and 50 million shares of Constellation's equity. The remainder will be composed of $12.7 billion of debt assumption.
According to Constellation, the deal would create the largest clean energy producer in the U.S. The deal is still pending approval from several regulatory bodies, and is expected to close in the fourth quarter of this year.
