NRG Energy Inc. has announced a major acquisition deal with LS Power to acquire a portfolio of natural gas generation assets and a commercial and industrial virtual power plant (C&I VPP) platform. Valued at approximately $12 billion, the transaction marks a transformative step for NRG, effectively doubling its power generation capacity to 25 gigawatts (GW). The acquisition includes 18 natural gas-fired power facilities across nine states and CPower, a leading C&I VPP platform with about 6 GW of capacity serving over 2,000 customers.
Larry Coben, NRG’s Chair, President, and CEO, described the acquisition as pivotal for the company’s future. “We’re entering a power demand supercycle, and this move positions us to lead with reliable, flexible energy solutions,” he said. NRG Energy believes the expansion strengthens its credit profile, accelerates its growth rate, and supports robust capital returns. The deal significantly expands NRG’s presence in key markets such as the Northeast and Texas, where the bulk of its customer base is located.
Financial Outlook and Strategic Benefits
The acquisition is projected to be immediately accretive to NRG Energy’s adjusted earnings per share and is expected to raise its long-term earnings growth rate to at least 14%, up from a previous target of 10%. NRG also plans to return about $9.1 billion to shareholders through share repurchases and dividends over the next five years. The purchase provides additional benefits, including 1+ GW of potential power uprates, development-ready sites, and enhanced service offerings for high-demand sectors such as data centers.
Following the transaction, NRG expects to maintain a strong balance sheet and reach a net debt-to-adjusted EBITDA ratio below 3.0x within 24 to 36 months. This is an increase from the company’s current leverage target of 2.5x to 2.75x. LS Power, which will receive part of the consideration in NRG stock, is expected to own around 11% of NRG’s outstanding shares post-deal. A six-month lock-up period and voting trust agreement will ensure LS Power’s voting rights remain below 10%.
Deal Structure, Approvals, and Market Impact
The $12 billion deal includes $6.4 billion in cash, $2.8 billion in NRG Energy stock, and $3.2 billion in assumed debt, slightly offset by $0.4 billion in tax benefits. The acquisition is pending regulatory approval from bodies such as the Federal Energy Regulatory Commission (FERC) and the New York State Public Service Commission. Completion is expected in the first quarter of 2026.
LS Power will retain around 10 GW of power assets and continue to invest in its core infrastructure and renewable initiatives. Paul Segal, LS Power CEO, called the deal a milestone that ensures the acquired portfolio continues to meet growing energy demands under NRG’s stewardship.
NRG Energy’s acquisition signals its intent to solidify a dominant position in the evolving energy landscape, offering resilient, cost-efficient solutions during a time of increasing power demand across North America.
Explore More News In Our Oil Gas Energy Magazine.
