In a stock deal valued at some $1.7 billion, NRG Energy, based at 211 Carnegie Center, has reached an agreement to buy Houston, TX, based wholesale power provider GenOn Energy.
Under terms of the deal, GenOn Energy shareholders will get .1216 of an NRG Energy share for each GenOn share. Based on closing share prices on July 20, the transaction represents a 20.6 percent premium to GenOn’s shareholders. Upon completion of the deal, NRG shareholders will own 71 percent of the combined company and GenOn shareholders will own 29 percent.
According to NRG, the deal will “reinforce the ability” to pay the 9 cents per share quarterly dividend (36 cents per share on an annual basis) previously announced by NRG for both companies’ shareholders.
The combined company, which will retain the name NRG Energy, will become the largest competitive power generation company in America with approximately 47,000 megawatts of fossil fuel, nuclear, solar, and wind capacity in the East, Gulf Coast, and western United States, according to NRG. The company has a combined value of $18 billion.
“This combination ushers in a new era of scale, scope, and market and fuel diversification in the competitive power industry,” said NRG President and CEO David Crane, who will continue his present positions in the combined company.
Edward R. Muller, GenOn chairman and CEO, will join the NRG board of directors as vice chairman.
In addition to Crane continuing in his position, Kirk Andrews will remain as chief financial officer, and Mauricio Gutierrez will serve as chief operating officer of the combined company. Anne Cleary of GenOn will become the chief integration officer.
The combined company will be dual headquartered, with financial and commercial headquarters in Princeton, and operational headquarters in Houston. NRG and GenOn expect to close the merger by the first quarter of 2013.
NRG Energy Inc. (NRG), 211 Carnegie Center, Princeton 08540-6213; 609-524-4500; fax, 609-524-4501. David Crane, president and CEO. www.nrgenergy.com.