The $6.8 billion acquisition of Pepco Holdings Inc. (NYSE: POM) by Exelon Corp. (NYSE: EXC) announced this morning creates a utility company with some 10 million customers in the region around the District of Columbia to Philadelphia and southern New Jersey. The all-cash deal is expected to close in the second or third quarter of 2015.

Exelon also reported first quarter results this morning, posting earnings per share of $0.10 on revenues of $7.24 billion. Revenues were well above analysts’ consensus estimates but profits were well below the estimate of $0.69 per share.

Both utilities have been having a good year so far in 2014, with Pepco shares up 19% so far and Exelon up 32%. Both offer solid dividend yields — Pepco at 5% and Exelon at 3.4% — and the Dow Jones Utility index is up 13% so far in 2014 as investors like the idea of regulated returns that pay nice dividends in these uncertain days.

Exelon expects the acquisition to begin adding to earnings in the first year after it closes. And if there’s anything Exelon needs its something that adds to earnings. It has missed EPS estimates in 3 of the last 5 quarters and revenue has been slipping as well. Right now, with investors chasing dividend stocks, is a good time for Exelon to make this kind of move.

Pepco’s shares are trading up around 17.5% in mid-afternoon trading Wednesday at $26.78 in a 52-week range of $18.04 to $26.89. The high was set earlier today.

Exelon is trading down about 3.5% at $34.93 in a 52-week range of $26.45 to $37.44.

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