NRG Energy has agreed for the sale of its six natural gas generation assets to LS Power, an US-based energy infrastructure developer and operator, for $4bn in cash.
The transaction, which is subject to working capital and other closing adjustments, is expected to conclude in the second quarter of 2027.
Completion of the transaction is pending regulatory approvals from bodies including the Federal Energy Regulatory Commission, the Hart-Scott-Rodino, and the New York State Public Service Commission.
The sale covers a total of 4.9GW of generation capacity, with the assets located in New York (Ravenswood), Rhode Island (Ocean State Power), Connecticut (Wallingford), and Texas (Jack County, Johnson County, and R.W. Miller).
The purchase price represents an implied 2027 valuation multiple of 8.0x enterprise value to adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA).
NRG president and CEO Robert Gaudette said: “This transaction will strengthen our balance sheet, support increased share repurchases and preserve flexibility to invest in growth opportunities with compelling returns.
“It demonstrates our commitment to disciplined capital allocation and creates long-term value for shareholders.”
Following completion of the sale, NRG will retain ownership and operation of 20GW of generation capacity across the US, including 10GW in ERCOT and the same capacity in PJM.
The company anticipates that an additional 1.1GW will be operational in ERCOT by 2028 through its remaining Texas Energy Fund projects.
It has outlined plans for the transaction’s proceeds, which include a $3bn share repurchase programme scheduled across 2026 and 2027, with $1bn expected to commence before the close of 2026.
NRG also intends to use $2bn of the proceeds for further debt reduction at closing, contributing to a total planned 2027 debt reduction of $3bn.
Remaining funds will be allocated to contracted growth investments or additional debt reduction.
With this acquisition, along with the pending purchase of approximately 4.4GW from Constellation, LS Power’s natural gas generation fleet is expected to increase from 2.2GW to 11.5GW. This would bring its total generation capacity, including hydro, wind, solar, and battery storage, to over 19GW.
Barclays is acting as lead financial advisor and White & Case as legal counsel to NRG.
LS Power was advised by Milbank on legal matters, while Evercore and Scotiabank served as financial advisors.
