US power firms Mirant, RRI Energy in $1.6-billion stock merger
13 Apr 2010
Two US power companies, Mirant Corporation and RRI Energy have yesterday agreed to merge in a $1.6 billion stock transaction, creating one of the largest independent power producers in the country.
Atlanta, Georgia-based Mirant and Houston, Texas-headquartered RRI Energy will combine in an all-stock tax-free merger to form GenOn Energy, a power producer with 24,700MW of electric generating capacity and a market value of about $3.1 billion.
Under the terms of the merger agreement, which has been approved unanimously by the boards of directors of both companies, Mirant stockholders will receive 2.835 shares of RRI Energy common stock for each share of Mirant common stock they own.
Upon closing, which is expected before the end of 2010, Mirant stockholders will own approximately 54 per cent of the equity of the combined company and RRI Energy stockholders will own approximately 46 per cent.
The merger is expected to bring in annual cost savings of $150 million and ample liquidity, with the combined cash balance as of 31 December 2009 was $2.9 billion, both companies said in a statement.
RRI Energy owns and leases a total of 14,581 MW of generation assets in Southern California, the Midwest, the Mid Atlantic and the Southeast, while Mirant owns and leases a total of 10,076 MW of generation assets in Northern California, the Mid Atlantic and the Northeast.
