NRG Energy (NRG) to Acquire GenOn Energy (GEN) in $1.7B All-Stock Deal; Pre-Announces Q2 EBITDA
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Price: $26.79 +0.19%
EPS Growth %: +4.7%
Financial Fact:
Less: Net loss attributable to noncontrolling interest: 1M
Today's EPS Names:
CO, JW-A, FDS, More
EPS Growth %: +4.7%
Financial Fact:
Less: Net loss attributable to noncontrolling interest: 1M
Today's EPS Names:
CO, JW-A, FDS, More
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NRG Energy, Inc. (NYSE: NRG) and GenOn Energy, Inc. (NYSE: GEN) have signed a definitive agreement to combine the two companies in a stock-for-stock tax-free transaction, creating the largest competitive generator in the United States with a diverse fleet of approximately 47,000 megawatts (MW) with asset concentrations in the East, Gulf Coast and West and a combined enterprise value of $18 billion.
The transaction will enhance annual combined company EBITDA by $200 million by 2014 by realizing cost and operational efficiency synergies. In addition, the transaction will enable the combined company to reduce its interest and liquidity costs, and realize other balance sheet efficiencies, in aggregate, of $100 million per year. As a result, total recurring FCF benefits generated by this transaction will be approximately $300 million per year.
GenOn shareholders will receive 0.1216 of a share of NRG common stock in exchange for each GenOn share of common stock. Based on NRG’s and GenOn’s closing share prices on July 20, the transaction represents a 20.6% premium to GenOn’s shareholders.
Following completion of the transaction, NRG shareholders will own 71% of the combined company and GenOn shareholders will own 29%.
After closing, the Board of Directors will have 16 members with 12 members from the NRG Board and four joining from the GenOn Board. Howard Cosgrove will remain Chairman of the NRG Board and GenOn Chairman and CEO Edward R. Muller will join the NRG Board as Vice Chairman.
In addition to David Crane continuing to serve as Director, President and CEO, 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 of NRG at closing.
John Ragan and Lee Davis, both currently of NRG, will act as Regional Presidents of the Gulf Coast and East regions, respectively, and John Chillemi of GenOn will become Regional President of the West region, at which time Tom Doyle will focus his efforts as President of NRG Solar.
The combined company will be dual headquartered, with financial and commercial headquarters in Princeton and operational headquarters in Houston.
NRG is also pre-announcing preliminary results for its second quarter 2012. For NRG alone, adjusted EBITDA will be approximately $530 million for the second quarter of 2012 and approximately $830 million in the first half of 2012. NRG also is reaffirming 2012 guidance of $1,825-$2,000 million of adjusted EBITDA and $800-$1,000 million of FCF before growth investment.
NRG's financial advisors were Credit Suisse and Morgan Stanley and J.P. Morgan acted as GenOn’s financial advisor.
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The transaction will enhance annual combined company EBITDA by $200 million by 2014 by realizing cost and operational efficiency synergies. In addition, the transaction will enable the combined company to reduce its interest and liquidity costs, and realize other balance sheet efficiencies, in aggregate, of $100 million per year. As a result, total recurring FCF benefits generated by this transaction will be approximately $300 million per year.
GenOn shareholders will receive 0.1216 of a share of NRG common stock in exchange for each GenOn share of common stock. Based on NRG’s and GenOn’s closing share prices on July 20, the transaction represents a 20.6% premium to GenOn’s shareholders.
Following completion of the transaction, NRG shareholders will own 71% of the combined company and GenOn shareholders will own 29%.
After closing, the Board of Directors will have 16 members with 12 members from the NRG Board and four joining from the GenOn Board. Howard Cosgrove will remain Chairman of the NRG Board and GenOn Chairman and CEO Edward R. Muller will join the NRG Board as Vice Chairman.
In addition to David Crane continuing to serve as Director, President and CEO, 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 of NRG at closing.
John Ragan and Lee Davis, both currently of NRG, will act as Regional Presidents of the Gulf Coast and East regions, respectively, and John Chillemi of GenOn will become Regional President of the West region, at which time Tom Doyle will focus his efforts as President of NRG Solar.
The combined company will be dual headquartered, with financial and commercial headquarters in Princeton and operational headquarters in Houston.
NRG is also pre-announcing preliminary results for its second quarter 2012. For NRG alone, adjusted EBITDA will be approximately $530 million for the second quarter of 2012 and approximately $830 million in the first half of 2012. NRG also is reaffirming 2012 guidance of $1,825-$2,000 million of adjusted EBITDA and $800-$1,000 million of FCF before growth investment.
NRG's financial advisors were Credit Suisse and Morgan Stanley and J.P. Morgan acted as GenOn’s financial advisor.
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