NRG Energy Inc. (NYSE: NRG) announced it has entered into a definitive agreement with Centrica PLC under which NRG will acquire Direct Energy, a North American subsidiary of Centrica PLC for $3.625 billion in an all-cash transaction.
The transaction builds on NRG’s status as a growing, customer-driven integrated energy provider, adding more than three million retail customers across 50 states and Canada. The transaction on closing is expected to generate approximately $740 million in annual run-rate Adjusted EBITDA1, while enhancing free cash flow strength and stability and providing earnings diversification.
With operations in all 50 U.S. states and 6 Canadian provinces, Direct Energy is one of North America’s leading retail providers of electricity, natural gas, and home and business energy-related products and services. For NRG, the acquisition builds on and complements its integrated model, enabling better matching of power generation with customer demand. It also broadens NRG’s presence into states and locales where it does not currently operate, supporting NRG’s objective to diversify its business.
The combination will deliver greater efficiencies and enable continued investment in NRG’s award-winning customer service, operational best practices and reliability. With NRG’s decades of participation in electricity markets throughout the U.S., NRG has broad insights into energy market dynamics and trends to inform innovative solutions and products for the combined company’s customers.
“This combination improves NRG’s status as one of North America’s premier integrated power companies, bringing the power of energy to people and organizations through our diverse generation platform and leading retail brands,” said Mauricio Gutierrez, President and Chief Executive Officer of NRG. “The acquisition aligns with our broader strategy of perfecting our integrated business model and drives significant value creation for our customers and stakeholders. Direct Energy ’s complementary assets, talented team and excellent customer service make it a natural fit for our portfolio, and we look forward to welcoming Direct Energy to the NRG team.”
NRG will acquire Direct Energy for $3.625 billion in cash, subject to a working capital adjustment.
Related News: : NRG Energy to acquire retail energy provider Direct Energy ,July 24, 2020 , By Caitlin Cosper
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