Deere sells wind energy business to Exelon for $900 million

The company said Tuesday that the sale of John Deere Renewables will allow it to focus on its core business of manufacturing farm equipment.

Deere said in February it was reviewing options for John Deere Renewables. It has invested $1 billion over the past five years in the financing, development and ownership of wind turbines projects. The business includes 36 completed wind farm projects in eight states with an operational capacity of 735 megawatts.

Deere will record a $25 million after-tax charge in the fourth-quarter. The sale was not reflected in the company’s $375 million fourth-quarter earnings estimate from earlier this month.

Exelon, the largest U.S. nuclear power operator, said the acquisition of John Deere Renewables will add 735 operating megawatts (MW) of clean energy to its portfolio, which currently includes about 1,000 MW of renewable power.

The deal includes a provision for an additional payment of $40 million for construction on 230 MW of wind power capacity in advanced stages of development.

The Deere wind farms, 36 projects in eight states,  have an operating capacity large enough to power 160,000 to 220,000 households. In total, the wind farms have about three-quarters of the electricity output capacity of a nuclear reactor.

Exelon, which currently owns 31,000 megawatts of power generation, including 17 nuclear reactors, said the Deere wind purchase would contribute to earnings in 2012 and to cash flow in 2013.

The acquisition will become part of the Exelon Power division of Exelon Generation, which already includes more than 1,000 MW of owned and contracted renewable power, including wind, hydroelectricity, landfill gas and solar.

The United States currently has no legislation restricting carbon emissions, which are blamed for contributing to global warming. A proposal that would have introduced emission limits on a national level was scuttled in the U.S. Congress earlier this year.