NRG Energy doubles capacity with $12B asset acquisition

HOUSTON & NEW YORK - NRG Energy Inc. (NYSE: NRG) has announced the definitive purchase of natural gas generation facilities and a commercial & industrial virtual power plant (C&I VPP) platform from LS Power Equity Advisors, LLC. The cash and stock deal is valued at approximately $12.0 billion and is expected to double NRG’s generation capacity.

The transaction will add 18 natural gas-fired facilities totaling around 13 GW to NRG’s portfolio, predominantly in the Northeast and Texas, aligning with most of its load locations. Additionally, NRG will acquire CPower, a leading C&I VPP platform with about 6 GW capacity serving over 2,000 commercial and industrial customers.

NRG’s Chair, President & CEO, Larry Coben, expressed confidence in the acquisition’s ability to meet the surging power demand and drive value for stakeholders. Paul Segal, CEO of LS Power, echoed similar sentiments, noting the portfolio’s strategic fit for the growing energy markets.

Financially, the acquisition is set to be immediately accretive to NRG’s Adjusted Earnings Per Share, prompting the company to raise its 5-year Adjusted EPS CAGR from +10% to +14%. NRG aims to return approximately $9.1 billion to shareholders through repurchases and dividends over the next five years. The company has demonstrated a strong commitment to shareholder returns, with InvestingPro data showing five consecutive years of dividend increases and aggressive share buybacks. For deeper insights into NRG’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

NRG’s enhanced credit profile from the acquisition will support $1 billion in annual share repurchases until a leverage target of

The transaction terms include $6.4 billion in cash, $2.8 billion in stock consideration, and $3.2 billion of net debt assumed, offset by roughly $0.4 billion of tax benefits. LS Power will own about 11% of NRG’s pro forma shares outstanding, with a 6-month lock-up period on their stock.

Subject to regulatory approvals, the acquisition is anticipated to close in the first quarter of 2026. NRG and LS Power have secured financial and legal advisors for the transaction, including Citi and Goldman Sachs & Co. LLC for NRG and Evercore for LS Power.

NRG will maintain its focus on delivering natural gas, electricity, and smart home solutions across North America. The deal is based on a press release statement and is intended to provide a balanced and factual account of the transaction.

In other recent news, NRG Energy has reported several significant developments. The company has announced the acquisition of six power generation facilities from Rockland Capital for $560 million, which will add 738 Megawatts of natural gas-fired capacity to its Texas operations. This acquisition is expected to be earnings-accretive and is primarily financed through corporate debt. Additionally, NRG Energy has made a strategic investment of $2.5 million in Equilibrium Energy to enhance grid stability through AI technology, a move aligned with its long-term vision for innovation in the energy sector.

NRG Energy shareholders have approved amendments to the company’s governing documents, which include eliminating supermajority voting requirements and updating director removal standards. This follows the re-election of all eleven directors and the endorsement of executive compensation. In personnel news, Rasesh Patel, President of NRG’s Consumer division, is set to retire in May 2025, with a successor expected to be announced by the end of the second quarter.

Furthermore, Goldman Sachs has initiated coverage on NRG Energy with a Buy rating and a price target of $129, citing strong free cash flow and potential growth from data center agreements. The firm’s analysis highlights NRG’s strategic capital allocation and expansion plans as positive factors for long-term growth. These developments collectively underscore NRG Energy’s efforts to strengthen its market position and adapt to evolving industry demands.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.