(MENAFN) NRG Energy announced that it acquired GenOn Energy Inc in a USD1.7 billion stock deal, creating the biggest competitive US generator with a fleet of 47,000 megawatts, reported Reuters.
Starting 2014, the deal, which is forecasted to close in 2013's first quarter, will let the two independent power producers save about USD300 million on a yearly basis from cost, operating improvements and balance sheet efficiencies.
The company will pay 0.1216 share of its common stock, worth just under USD2.20 a share, for each GenOn share, moreover, GenOn shareholders will own nearly 29 percent of the combined firm, whose new board will consist of 16 members, 12 from NRG and the rest from GenOn's board.
The combined company is expected to increase earnings before interest, taxes, depreciation and amortization (EBITDA) by USD200 million by 2014 via cost and operational savings.
Furthermore, free cash flow will have a total recurring benefit of almost USD300 million annually, and the new company will slash indebtedness by USD1 billion.
It is worth noting that the combined entity's assets will be concentrated in the east, west and on the Gulf Coast and will allow NRG to expand its presence in the Northeast and California.
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