Electricite de France SA, Europe's biggest power producer, offered to buy Constellation Energy Group Inc.’s stake in a venture to build U.S. nuclear plants in a sign relations between the two companies are souring.
EDF will purchase Constellation's interest at "fair market value," EDF said in a letter to its Baltimore-based partner yesterday. The Paris-based utility wants Constellation to then forgo an option to sell 12 non-nuclear plants to EDF for about $2 billion. The option expires in December.
EDF will "vigorously and confidently resist" enforcement of the option if Constellation takes "imprudent and destructive" steps to exercise it, the letter said. Constellation, led by Chief Executive Officer Mayo A. Shattuck, 56, responded in a statement yesterday that it will hold its French partner to its contractual obligations. Constellation is ready to discuss EDF’s offer, the statement said.
The French utility is the biggest shareholder in Constellation, which owns the largest natural-gas and electric utility in Maryland. The two set up the UniStar Nuclear Energy venture in 2007 to build as many as four nuclear reactors at the Calvert Cliffs plant in Maryland, and in New York. Relations between the two cooled when Constellation said Oct. 9 it was abandoning negotiations on a $7.5 billion loan guarantee for the Maryland project, citing excessive risk.
