New Jersey utility,
NRG Energy Inc
) proposed acquisition of GenOn Energy Inc. received approval
from the shareholders of both companies, the Federal Trade
Commission and the Texas regulatory body. However, the
acquisition is still awaiting the green signal from the Federal
Energy Regulatory Commission and New York Public Service
The GenOn buyout was announced by NRG Energy in July 2012 for
an amount of $1.94 billion. The acquisition is expected to be
closed in early 2013 provided all regulatory nods get through.
With the GenOn purchase, NRG Energy's total generating capacity
will climb to 47,000 megawatts and enable the company to become
one of the key competitive utility providers in the U.S.
GenOn stakeholders' will receive 0.1216 of an NRG share. NRG
Energy's shareholders will hold 71% of the overall stock while
GenOn's will own 29%.
The Texas acquisition is critical to NRG Energy's expansion
plans and will become a major cornerstone for growth. Besides,
the merger of GenOn will help in substantially improving NRG
Energy's upcoming financials as its third-quarter loss of 1 cent
per share fell more than 50 cents than the year-ago quarter
NRG Energy will also accrue operational benefits like cost
synergies, maximizing efficiencies and enhancing cash flows which
would significantly drive up margins and further encourage
However, the New Jersey area has been one of the worst
affected by Hurricane Sandy and will impact NRG Energy's
operations in the subsequent quarters. Taking this into account,
the company has trimmed its adjusted EBITDA outlook for 2012 to
the range of $1,875 million to $1,925 million from its prior
expectation of $1,825 million to $2,000 million. The Zacks
Consensus Estimates for the fourth quarter and full year 2012
currently stand at 8 cents and 82 cents per share,
NRG Energy holds a short-term Zacks #3 Rank (Hold rating). NRG
Energy competes head-to-head with
The AES Corporation
). AES reported favorable results in the third-quarter 2012. AES
Corporation's business is spread across the U.S., Bulgaria and
Latin America which lends constancy to its operations unlike NRG
Energy's which is primarily confined to the U.S.
Based in Princeton, New Jersey, NRG Energy Inc. is a wholesale
power generation company engaged in the ownership, development,
construction, and operation of power generation facilities.
AES CORP (AES): Free Stock Analysis Report
NRG ENERGY INC (NRG): Free Stock Analysis
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