Dynegy plans to spend more than $6 billion to buy several coal and gas power generation plants from Duke Energy and Energy Capital Partners.
Shares of the Houston power producer soared Friday before markets opened and after it announced the deals.
The company plans to spend $2.8 billion on Duke's retail business and ownership interest in several plants and $3.45 billion for assets of Energy Capital Partners, or ECP. The deal will add about 12,500 megawatts of coal and gas generation and expand Dynegy's retail business into Ohio, Pennsylvania and Michigan.
Dynegy said that the deals will boost its presence in the Midwest and New England, including three new markets: Ohio, Pennsylvania and Michigan. The company expects to nearly double its existing portfolio to almost 26,000 megawatts of generating capacity nationally.
Dynegy expects both deals to close by the end of next year's first quarter and said the acquisitions will complement its existing business and add fuel diversification. Most of the plant acquisitions involve either modern combined cycle natural gas plants or environmentally compliant coal generation plants.
It plans to finance the purchase with $5 billion in new bonds and $1.25 billion in equity and equity-linked securities.
Duke Energy, based in Charlotte, North Carolina, said the sale will add to its earnings by 2016, and it is evaluating how to use proceeds from the transaction.
Shares of Dynegy Inc. were up 14 percent, or $4.23, to $33.95 in morning trading. The stock has climbed 58 percent so far this year.
Duke Energy Corp. shares added 67 cents to $73.71.