The companies expect to enter into a definitive merger agreement by close of business. Upon signing a definitive merger agreement, Constellation Energy will issue $1 billion of preferred equity yielding 8% to MidAmerican.

The tentative agreement, which has been unanimously approved by both companies’ boards of directors, is subject to further due diligence, as well as shareholder and customary federal, state and local regulatory approvals. The transaction is expected to close within nine months.

Gregory Abel, president and CEO of MidAmerican Energy, said: In Constellation Energy, we have a partner that brings a world-class organization of people and an industry-leading collection of energy assets. We intend, as with all of our investments, to allow Constellation Energy to operate autonomously as it pursues its long-term goals.