The sale of Direct energy will allow Centrica to focus on its core home markets of the UK and Ireland
US-based NRG Energy has signed an agreement with Centrica to acquire Direct Energy for $3.625bn in an all-cash transaction.
Direct Energy is a North American subsidiary of Centrica, with operations in all 50 US states and 6 Canadian provinces.
It is one of leading retail providers of electricity, natural gas, and home and business energy-related products and services.
The acquisition will enable NRG to complement its integrated model, by adding more than three million retail customers across the US states and Canada.
In addition, the transaction supports NRG’s business diversification plans, by expanding the company’s presence into states and locales where it does not currently operate.
NRG president and chief executive officer said: “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.
“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.”
Direct Energy acquisition to add over 3 million customers to NRG’s retail business
As 76% of Direct Energy’s Home Energy customers are located outside of Texas, the acquisition offers significant regional diversity to NRG.
The transaction adds more than 3 million customers to NRG’s retail business.
In addition, it is expected to enable the combined company to reduce costs and leverage shared best practices.
The acquisition is also anticipated to offer NRG the ability to expand its successful capital-light renewable power purchase agreement (PPA) strategy outside of Texas.
On the other hand, the sale of Direct energy will allow Centrica to focus on its core home markets of the UK and Ireland, where it has a major presence.
Subject to customary closing conditions, consents and regulatory approvals, the transaction is expected to be completed by the end of 2020.