Dynegy Inc. and LS Power Group said Friday the companies have merged to combine Dynegy's current assets and operations with LS Power's generation portfolio. Dynegy will acquire a 50 percent ownership interest in a development joint venture with LS Power.
Under the terms of the transaction, LS Power will receive 340 million shares of Dynegy common stock plus $100 million in cash and a $275 million Dynegy note. The combined group will also assume approximately $1.8 billion in net debt from LS Power. The transaction will create a combined company with more than 20,000 megawatts comprised of 31 power plants in 15 states. The company's expanded portfolio will also include a controlling interest in the Plum Point facility in Arkansas, the only coal-fired plant in the country currently under construction by an independent power producer. The joint venture will immediately own a pipeline of nine Greenfield projects totaling more than 7,600 megawatts in various stages of development and approximately 2,300 megawatts of repowering opportunities. Forty-five percent of the new portfolio's generating capacity will be located in the Midwest, with 26 percent in the West, 22 percent in the Northeast and the remainder in the South.Thirty-three percent of the combined portfolio will be natural gas-fired combined-cycle capacity, 39 percent natural gas-fired peaking capacity and 21 percent baseload coal/oil. The remainder of the combined portfolio will have dual fuel capabilities.