Energy supplier FPL Group Inc. (FPL) is buying rival power-plant operator Constellation Energy Group Inc. (CEG) for more than $11 billion in stock in a deal announced Monday that would create one of the nation's biggest electricity conglomerates.

Juno Beach, Fla.-based FPL Group, with operations nationwide, derives most of its revenue from its utility subsidiary, Florida Power & Light. Constellation Energy, based in Baltimore, operates Baltimore Gas and Electric, but gets most of its sales from nonregulated operations, including energy trading.

The combined company, to be called Constellation Energy, will have a market capitalization of about $28 billion, revenue of $27 billion and total assets of $57 billion.

FPL has more generation capacity and less peak demand, while Constellation, a major power trader, is in the opposite position, executives from the two companies told investors in a conference call.

"The pursuit of this transaction and why the marriage made so much sense to us is that now we can grow without constraint," said Mayo A. Shattuck, chairman, president and chief executive of Constellation Energy, who will become chairman of the board of the new company.

Lewis Hay, chairman, president and chief executive of FPL Group, who will become chief executive officer of Constellation Energy, said both sides felt it was important to choose partners before industry consolidation eliminated their ability to choose.

"I think we were both vulnerable to other people taking actions that could preempt that," Hays said.

Under the terms of the transaction which the companies described as a merger, each share of Constellation Energy held will be converted into 1.444 shares of the combined company, while each FPL Group share will be converted into one share of the new company.

FPL shareholders will own 60 percent of the combined company, while shareholders of Constellation Energy will own about 40 percent.

Based on FPL's closing share price of $42.95 on Friday, Constellation's shares would be valued at about $11.07 billion after the deal closes. The companies said Constellation shareholders will be getting a 15 percent premium over the average closing price over the 20 days ended Dec. 13.

In addition, FPL will have nine seats on the new 15-member board whiole Constellation will get the other six.

The deal has been approved by the boards of both companies. Shareholders are expected to vote on the deal in the second quarter of 2006, and the companies expect to receive the necessary regulatory approvals in nine to 12 months, the executives said.

Constellation shares fell $2.16, or 3.5 percent, to $59.46 on the New York Stock Exchange, while FPL shares rose 21 cents to $43.16.

Based on both companies' announced earnings expectations, the transaction is expected to add to earnings in the first full year of combined operations, excluding transaction and integration costs and the positive effects of purchase accounting.

In addition, the combined company is expected to generate at least $200 million to $250 million in pretax annual savings by the end of the third year after the merger. The majority of the savings are expected to result from consolidation of non-regulated business unit operations, sharing of best practices, improved procurement strategies, and consolidation of systems and support activities.

The new company's dividend is expected to be the same as FPL Group's dividend immediately before the merger. FPL paid a quarterly dividend of 35.5 cents on Dec. 15.