Post by jeffolie on Jul 22, 2012 19:35:06 GMT -6
Red Flag: electric wholesaler BIGGEST in US coming from a merger
Back in the 1920, the Roaring Twenties this sort of merger created an evil: monolopy or oligarchy of utilities.
Oversight to prevent this was passed into law in the Great Depression, but like Glass Stegal for banking, the laws and regulations are being ignored.
"... create the largest competitive power company in the U.S...NRG Energy, GenOn to merge ... Companies such as NRG and GenOn that primarily sell into the wholesale power markets are much more exposed to the ups and downs of commodity prices than companies such as Duke Energy Corp. DUK +0.15% and Southern Co. SO +0.15% , that operate utilities in states where regulators oversee their operations and set rates and investment returns. ..."
Obama's hand must be in this with the below 3 large solar farms plus $3B of taxpayer loans:
"... large solar-power business and has obtained more than $3 billion in federal loan guarantees to help build three large solar farms in California and Arizona... Two of the solar farms are being built by solar-panel makers First Solar Inc. FSLR -2.25% and SunPower Corp. SPWR +1.60% , and the third by solar-thermal power developer BrightSource Energy Inc.
==================================
July 22, 2012
NRG Energy, GenOn to merge in $1.7 billion deal
NRG Energy Inc. NRG -0.28% said Sunday that it plans to acquire rival GenOn Energy Inc. GEN -2.67% in a $1.7 billion all-stock deal that would create the largest competitive power company in the U.S.
The combined company would have about 47,000 megawatts of power plants across the U.S. and have an enterprise value of $18 billion, the companies said.
NRG President and Chief Executive David Crane will maintain his current positions at the combined company. GenOn Chairman and CEO Edward R. Muller will join the NRG board as vice chairman.
Both companies had considered merger opportunities over the last few years as a way to cut costs and expand their footprints to better compete. Then, Mr. Muller said he contacted Mr. Crane this past spring to discuss a potential deal.
After both companies ran the numbers, they discovered that the savings they would gain from merging, some $300 million a year, were larger than both men had anticipated, Mr. Muller said.
"The compelling logic of the combination made it such that once the two parties focused on it, everything worked smoothly toward a successful conclusion," Mr. Crane said in an interview.
The companies' plans come as U.S. power-plant operators have struggled against some of the lowest wholesale power prices in a decade, as a natural-gas production boom has kept gas prices and power prices at record lows. Companies such as NRG and GenOn that primarily sell into the wholesale power markets are much more exposed to the ups and downs of commodity prices than companies such as Duke Energy Corp. DUK +0.15% and Southern Co. SO +0.15% , that operate utilities in states where regulators oversee their operations and set rates and investment returns.
By combining their operations, NRG and GenOn expect to boost earnings before interest, taxes and other costs by $200 million by 2014, because of lower interest costs and other savings they expect to see from operating their fleets as one company. They expect an additional $100 million in savings related to the amount of cash the companies have to keep on hand to back their forward power sales.
The deal requires the approval of both companies' shareholders, as well as the Federal Energy Regulatory Commission, the New York Public Service Commission and the Public Utility Commission of Texas.
Under the deal, GenOn shareholders will receive 0.1216 of a share of NRG common stock in exchange for each GenOn share of common stock. The deal values GenOn shares at nearly $2.20 apiece, a 20.6% premium over their closing price Friday.
NRG shareholders will own 71% of the combined company and GenOn shareholders will own 29%, after the deal closes, expected by the first quarter of 2013.
NRG, based in Princeton, N.J., operates about 24,000 megawatts of nuclear, natural gas and coal-fired power plants in Texas, New York, Connecticut, California and other states. That capacity is enough to serve about 20 million homes. The company has a growing retail-power business, which sells electricity to customers in deregulated states such as Texas, New Jersey, Pennsylvania, Maryland and Illinois. NRG also has a relatively large solar-power business and has obtained more than $3 billion in federal loan guarantees to help build three large solar farms in California and Arizona.
Two of the solar farms are being built by solar-panel makers First Solar Inc. FSLR -2.25% and SunPower Corp. SPWR +1.60% , and the third by solar-thermal power developer BrightSource Energy Inc. GenOn, of Houston, owns about 23,000 megawatts of natural gas, coal and oil-fueled power plants in Maryland, New Jersey, New York, Pennsylvania, California and other states.
The combined company will have financial headquarters in Princeton and operational headquarters in Houston.
NRG also said it would report second-quarter earnings, before interest, taxes, depreciation and amortization, of $530 million. The company said it still expects 2012 adjusted earnings before taxes and other items of between $1.825 billion and $2 billion.
www.marketwatch.com/story/nrg-energy-genon-to-merge-in-17-billion-deal-2012-07-22-19485215
Back in the 1920, the Roaring Twenties this sort of merger created an evil: monolopy or oligarchy of utilities.
Oversight to prevent this was passed into law in the Great Depression, but like Glass Stegal for banking, the laws and regulations are being ignored.
"... create the largest competitive power company in the U.S...NRG Energy, GenOn to merge ... Companies such as NRG and GenOn that primarily sell into the wholesale power markets are much more exposed to the ups and downs of commodity prices than companies such as Duke Energy Corp. DUK +0.15% and Southern Co. SO +0.15% , that operate utilities in states where regulators oversee their operations and set rates and investment returns. ..."
Obama's hand must be in this with the below 3 large solar farms plus $3B of taxpayer loans:
"... large solar-power business and has obtained more than $3 billion in federal loan guarantees to help build three large solar farms in California and Arizona... Two of the solar farms are being built by solar-panel makers First Solar Inc. FSLR -2.25% and SunPower Corp. SPWR +1.60% , and the third by solar-thermal power developer BrightSource Energy Inc.
==================================
July 22, 2012
NRG Energy, GenOn to merge in $1.7 billion deal
NRG Energy Inc. NRG -0.28% said Sunday that it plans to acquire rival GenOn Energy Inc. GEN -2.67% in a $1.7 billion all-stock deal that would create the largest competitive power company in the U.S.
The combined company would have about 47,000 megawatts of power plants across the U.S. and have an enterprise value of $18 billion, the companies said.
NRG President and Chief Executive David Crane will maintain his current positions at the combined company. GenOn Chairman and CEO Edward R. Muller will join the NRG board as vice chairman.
Both companies had considered merger opportunities over the last few years as a way to cut costs and expand their footprints to better compete. Then, Mr. Muller said he contacted Mr. Crane this past spring to discuss a potential deal.
After both companies ran the numbers, they discovered that the savings they would gain from merging, some $300 million a year, were larger than both men had anticipated, Mr. Muller said.
"The compelling logic of the combination made it such that once the two parties focused on it, everything worked smoothly toward a successful conclusion," Mr. Crane said in an interview.
The companies' plans come as U.S. power-plant operators have struggled against some of the lowest wholesale power prices in a decade, as a natural-gas production boom has kept gas prices and power prices at record lows. Companies such as NRG and GenOn that primarily sell into the wholesale power markets are much more exposed to the ups and downs of commodity prices than companies such as Duke Energy Corp. DUK +0.15% and Southern Co. SO +0.15% , that operate utilities in states where regulators oversee their operations and set rates and investment returns.
By combining their operations, NRG and GenOn expect to boost earnings before interest, taxes and other costs by $200 million by 2014, because of lower interest costs and other savings they expect to see from operating their fleets as one company. They expect an additional $100 million in savings related to the amount of cash the companies have to keep on hand to back their forward power sales.
The deal requires the approval of both companies' shareholders, as well as the Federal Energy Regulatory Commission, the New York Public Service Commission and the Public Utility Commission of Texas.
Under the deal, GenOn shareholders will receive 0.1216 of a share of NRG common stock in exchange for each GenOn share of common stock. The deal values GenOn shares at nearly $2.20 apiece, a 20.6% premium over their closing price Friday.
NRG shareholders will own 71% of the combined company and GenOn shareholders will own 29%, after the deal closes, expected by the first quarter of 2013.
NRG, based in Princeton, N.J., operates about 24,000 megawatts of nuclear, natural gas and coal-fired power plants in Texas, New York, Connecticut, California and other states. That capacity is enough to serve about 20 million homes. The company has a growing retail-power business, which sells electricity to customers in deregulated states such as Texas, New Jersey, Pennsylvania, Maryland and Illinois. NRG also has a relatively large solar-power business and has obtained more than $3 billion in federal loan guarantees to help build three large solar farms in California and Arizona.
Two of the solar farms are being built by solar-panel makers First Solar Inc. FSLR -2.25% and SunPower Corp. SPWR +1.60% , and the third by solar-thermal power developer BrightSource Energy Inc. GenOn, of Houston, owns about 23,000 megawatts of natural gas, coal and oil-fueled power plants in Maryland, New Jersey, New York, Pennsylvania, California and other states.
The combined company will have financial headquarters in Princeton and operational headquarters in Houston.
NRG also said it would report second-quarter earnings, before interest, taxes, depreciation and amortization, of $530 million. The company said it still expects 2012 adjusted earnings before taxes and other items of between $1.825 billion and $2 billion.
www.marketwatch.com/story/nrg-energy-genon-to-merge-in-17-billion-deal-2012-07-22-19485215