Vallari Srivastava
2 min read
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By Vallari Srivastava
(Reuters) -NRG Energy said on Monday it would acquire power generation assets from energy infrastructure investment firm LS Power in a deal valued at $12 billion, as the U.S. utility bets on surging electricity demand, sending shares up more than 24% to hit an all-time high of $148.30.
With U.S. power demand set to hit record highs in 2025, fueled by the explosive growth of AI and crypto-driven data centers as well as rising consumption in homes and businesses, NRG is doubling down on its generation capacity.
"We are in the early stages of a power demand supercycle," CEO Larry Coben said.
The deal would double NRG's generation capacity to 25 gigawatts (GW) across key markets in the Northeast and Texas and add a virtual power plant, which integrates multiple resources to provide power to the grid, to its portfolio.
NRG will also diversify its portfolio by expanding in the PJM - the largest U.S. power market operating across 13 states in the Mid-Atlantic and Midwest regions. The territory also includes northern Virginia, the world's largest data center hub.
According to S&P Global Ratings, increased exposure to PJM should benefit NRG due to rising secular price trends in the region.
NRG has been making a series of deals to capitalize on demand growth. It acquired Rockland's 738 MW natgas assets in March and signed supply deals earlier this year with two data center developers. The company is also working with GE Vernova to develop up to 5.4 GW of new natgas capacity.
The utility will fund the LS Power deal with $6.4 billion in cash, $2.8 billion in stock and assume $3.2 billion in net debt. It also expects to realize $400 million in tax benefits.
NRG said it was targeting $3.7 billion of debt reduction after the deal closes in the first quarter of 2026. As of March 31, the company's long-term net debt stood at $9.81 billion.
The transaction will immediately add to earnings, with NRG now forecasting long-term compounded annual growth rate of 14% for earnings per share compared with its prior view of 10%.
NRG also reported a rise in first-quarter profit on Monday, with net income rising nearly 47% from a year earlier to $750 million.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Sahal Muhammed and Krishna Chandra Eluri)
