NRG Energy to acquire bankrupt Edison Mission Energy assets for $2.64 bn
19 October 2013
US power company NRG Energy Inc yesterday said that it would acquire the assets of bankrupt, unregulated power producer Edison Mission Energy, for $2.64 billion.
NRG will pay through 12.7 million of its shares valued at $350 million, and the rest in cash. NRG will also assume $1.55 billion of EME's non-recourse debt.
The assets to be acquired include four coal-fired plants in Illinois, about 10 gas-fired plants in California, more than 30 wind projects in 11 states and a trading and asset management platform.
EME's generation portfolio, which consists of nearly 8,000 MW of generation capacity, includes 1,700 MW of wind capacity,1,600 MW of gas-fired capacity, 4,300 MW of coal-fired capacity and 400 MW of oil and waste coal-fired capacity.
California-based Edison Mission had filed for bankruptcy in December 2012 due to a fall in power prices and rising pollution control costs.
''Edison Mission Energy is a great fit with NRG, as virtually 100% of their assets, their particular expertises and the balance of their technologies deployed complement NRG's own assets, personnel and businesses,'' said, David Crane, president and CEO of NRG Energy.
''We are pleased to have reached this agreement with NRG, which maximises the value of our company for all of our stakeholders and paves the road for our emergence from Chapter 11,'' said EME president Pedro Pizarro.
''NRG is a leader in our industry, and its proposed acquisition of Edison Mission Energy is a powerful affirmation of the reputation and performance the men and women of EME have achieved over the past 25 years. We believe NRG and EME are a great fit operationally. We will continue to operate our fleet of coal, gas and wind energy facilities as we move through this transition and remain focused on ensuring safe and reliable operations,'' he added.
The deal Increases NRG's generation portfolio by nearly 8,000 MW, providing additional fuel diversity, geographic diversity, and opportunities to achieve economies of scale and significantly expands its pipeline of assets available to drive growth through future drop-downs with 1,600 MW of long-term, fully-contracted wind and natural gas assets, said New Jersey-based NRG in a statement.
NRG, the largest independent US electricity producer and a Fortune 500 company, serves more than 2 million residential and commercial customers throughout the country.
The transaction requires the approval of the bankruptcy court in Chicago and from the Federal Energy Regulatory Commission, the Federal Trade Commission, the US Department of Justice and the Public Utility Commission of Texas.