Mirant (MIR) and RRI Energy (RRI) Are Merging

Two midsize energy companies are joining forces to become a more dominant force in the energy industry. Mirant Corp. (

) and RRI Energy (

) are combining to form a new company called GenOn Energy in a $1.61 billion dollar deal. According to the AP, "Mirant stockholders will receive 2.835 RRI common shares for each Mirant share they own. Based on RRI's Friday closing price of $3.95, that values Mirant at $11.20 per share -- a 4 percent premium. Based on Mirant's 143.9 million shares outstanding at March 8, the deal values Atlanta-based Mirant at $1.61 billion." Investors in Mirant will own 54 percent of the newly formed company and RRI Energy investors will own 46 percent. The combined company will have a stronger balance sheet and increased operating efficiency through cost savings.