UPDATE 4-Exelon to become top US power distributor with Pepco buy
* Offers to buy Pepco for $6.83 bln, or $27.25/share in cash
* Deal will help Exelon sell more power at regulated rates
* Exelon shares fall 5 pct, Pepco up 18 pct (Updates share price, adds Breakingviews link)
By Swetha Gopinath and Kanika Sikka
April 30 (Reuters) - Exelon Corp said it would buy Pepco Holdings Inc for $6.83 billion, helping it overtake Duke Energy Corp as the biggest power distribution company in the United States.
The deal will allow Exelon to sell more power at stable rates set by regulators at a time when an abundance of cheap natural gas is dragging down power prices in the open market.
Exelon's move to reduce its exposure to the vagaries of the wholesale power market comes as U.S. utilities struggle with falling electricity demand in both the open and regulated markets due to increased energy efficiency and a weak economy.
However, Exelon's stock fell as much as 5 percent to $34.22.
"Some investors might question Exelon's desire to increase the company's regulated exposure at a time when power markets appear to be recovering," said Wells Fargo analyst Neil Kalton. Continuación...