Dynegy and Energy Capital Partners Agree to Acquire ENGIE’s 8.7-GW U.S. Fossil Portfolio
Dynegy Inc. and Energy Capital Partners (ECP), through a newly formed joint venture, have agreed to acquire ENGIE's U.S. fossil-fueled power generation portfolio, consisting of 8,731 MW of capacity located in the ERCOT, PJM, and ISO-New England transmission regions.
The $3.3 billion deal was announced on February 25, with an expected closing date in the fourth quarter 2016. Dynegy will own 65% of the joint venture-named Atlas Power-while ECP retains the remaining 35%. More than 90% of the assets being acquired are natural gas-fueled plants.
Houston-based Dynegy said the joint venture with ECP would help to diversify its geographic footprint. It noted that the deal provides an opportunity to establish a presence in the ERCOT market at an attractive price. Following the acquisition, Dynegy's combined portfolio will be about 35 GW, with 43% located in PJM, 18% in MISO, 15% in ISO-New England, 13% in ERCOT, 8% in CAISO, and 3% in New York-ISO.
"Today's acquisition continues Dynegy's transformation that began in 2011, to build a long term sustainable portfolio in key competitive markets. This transaction is a compelling value for our shareholders as it is the right assets, in the right markets, at the right price and unlocks considerable synergy value by utilizing our proven integration model and corporate platform," said Robert C. Flexon, president and CEO of Dynegy.
ENGIE-the former GDF Suez-is also in the process of transforming. In addition to the agreement with Dynegy and ECP, the company also agreed to sell its interest in the 2-GW Paiton coal-fired power plant in Indonesia and the Meenakshi coal-fired power plant in India. Those facilities will be dealt to Nebras Power Q.S.C. and India Power Corp. Ltd., respectively.
"These transactions perfectly illustrate the implementation of our transformation plan, to reduce ENGIE's carbon footprint and its exposure to commodity prices and to focus on two of our priorities: developing a low CO2 energy mix and innovative and integrated solutions for our clients," said Gi(C)rard Mestrallet, chairman and CEO of ENGIE.
The company also agreed to purchase Oakland, Calif.-based OpTerra Energy Services. With 25 regional offices across the U.S., OpTerra provides a comprehensive set of energy and sustainability management services to thousands of customers. ENGIE said the acquisition strengthens its objective to offer new and differentiated energy services to its current and prospective customers.
-Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)
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