Delmarva Power & Light and Atlantic Energy utilities are adjacent in Delaware and New Jersey on. In early 1996, they entered into merger negotiations, but were unable to reach an agreement on the price, because they do not agree on what impact deregulation would have on Atlantic. In the Atlantic currently regulated electricity market was profitable, although it was one of the high-cost producers in the region. But in a deregulated environment, where prices wou … Read more »

Delmarva Power & Light and Atlantic Energy utilities are adjacent in Delaware and New Jersey on. In early 1996, they entered into merger negotiations, but were unable to reach an agreement on the price, because they do not agree on what impact deregulation would have on Atlantic. In the Atlantic currently regulated electricity market was profitable, although it was one of the high-cost producers in the region. But in a deregulated environment, where prices would surely fall, Atlantic could unprofitable and therefore worth considerably less. The main issues are to determine how much and how Atlantic. A deal that disagreements over value paid bridge construction In contrast to certain situations where hedging to eliminate uncertainty, there is no way either to hedge decreases the speed of deregulation or the size of the price because of the competition.
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from
Benjamin C. Esty,
Tracy Aronson,
Mathew Mateo Millett
Source: Harvard Business School
19 pages.
Publication Date: Feb 13, 1998. Prod #: 298034-PDF-ENG
Atlantic Energy / Delmarva Power & Light (A) HBR case solution