NRG is acquiring a fleet of natural gas-fired power plants in a $12 billion transaction. (Source: Shutterstock.com)
NRG Energy is buying a fleet of natural gas-fired power plants in a cash-and-stock transaction valued at $12 billion.
The deal comes as natural gas producers and power generators are excited about growing electricity demand across the U.S. NRG shares were up over 24% in afternoon trading on May 12.
NRG’s acquisition from LS Power Equity Advisors includes 18 power facilities totaling 13 gigawatts (GW) of generation capacity, the companies said May 12.
The assets are located across nine states, including the Northeast and Texas, and double NRG’s generating capacity to 25 GW.
“This acquisition transforms NRG’s generation fleet and broadens our customized product offerings, enhancing our ability to bring the future of energy to millions of customers across the U.S.,” said Larry Coben, chair, president and CEO of NRG.
The acquisition is expected to be immediately accretive to NRG’s adjusted earnings per share. NRG also expects to return around $9.1 billion to shareholders over the next five years through buybacks and dividends.
NRG is buying 18 gas-fired power plants and 13 GW of incremental generating capacity. (Source: NRG)
The LS Power deal also includes CPower, a commercial and industrial (C&I) virtual power plant platform. CPower manages 6 GW of generation and serves over 2,000 C&I customers in deregulated power markets around the nation.
Consideration includes $6.4 billion of cash, $2.8 billion in stock to LS Power and $3.2 billion of assumed net debt. The combination is expected to generate $400 million in tax credits.
LS Power will own around 11% of the pro forma NRG shares outstanding after closing. The company has committed to a six-month lock-up period with regards to its NRG equity ownership.
The deal is expected to close in the first quarter of 2026.
Positioned for growth
U.S. electricity demand is rising. Renewable resources—wind, solar and battery storage—will fill some of the supply. But natural gas stands to be the biggest beneficiary, analysts say.
Gas-fired power demand is rising fastest in areas with heavy population growth, new industry and manufacturing and retiring capacity for coal-fired power.
Power demand to fuel AI is expected to spur an additional 3 Bcf/d to 15 Bcf/d of gas demand by 2030, according to East Daley Analytics forecasts.
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