NRG Wins In Reliant Deal (NRG, RRI, EXC)
May 1, 2009 by Douglas A. McIntyre
NRG Energy Inc. (NYSE:NRG) has completed its $287.5 million cash acquisition of Texas retail business of Reliant Energy Inc. (NYSE:RRI). This could have an impact on the ongoing battle over a proposed deal involving Exelon Corp. (NYSE:EXC).
NRG expects the deal to be “immediately accretive to EBITDA and free cash flow, and fully accretive in 2010.” In addition to the cash purchase price, NRG “will remit net working capital” to Reliant for the next six months.
It remains to be seen how this acquisition will affect the hostile offer by Exelon Corp. (NYSE:EXC) for NRG. NRG has been holding out for a better offer, and the addition of Reliant’s Texas business could make a change in the valuation. NRG has said that it expects the acquisition to contribute $150-$200 million to annual EBITDA. If Exelon still wants to play, the stakes have probably gone up.
Paul Ausick
May 1, 2009
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