Exelon/NRG: Fashion victim

The popping of the energy and debt bubbles hit US utilities too hard. The average utility has lost 30% of its market capitalisation over the past six months. Many are now valued below replacement cost. In that context, Exelon’s $6.2bn unsolicited bid for NRG Energy is likely to be the first of several opportunistic offers. The sector is certainly ripe for deals. True, the credit crunch will make it expensive for the capital intensive industry to raise funds. And rising yields for fixed-income i...