NRG Energy Inc NRG is purchasing Centrica plc’s CPYYF business in the United States for $3.6 billion in cash, the owner of British Gas announced Friday.
The sale of Direct Energy marks the end of Centrica’s international foray and the company is set to focus on its home base in the United Kingdom.
“This disposal is aligned to our strategy to become a simpler, leaner business and in addition it will materially strengthen our balance sheet and remove a source of earnings volatility from the Group,” Centrica Chief Executive Chris O’Shea said.
NRG Energy had made an unsolicited offer for Direct Energy, according to the Financial Times. The deal is expected to close in the fourth quarter of 2020.
Why It Matters
The energy sector remains affected by the ongoing COVID-19 pandemic, as commodity prices were battered, the Financial Times noted.
Centrica announced 5,000 layoffs, and revised staff contracts, in order to save $2.5 billion in 2021, instead of the originally targeted 2022.
The energy firm is also reported to have canceled its dividend and put off releasing financial guidance.
Centrica had lost its blue-chip status on London’s FTSE 100 index last month.
The sale of Direct Energy comes as the British firm released its 2020 interim half-yearly results, with adjusted operating profit falling 14% to $436.89 million. This compared with the $507.73 million figure posted in the first half of 2019.
NRG shares traded 0.09% lower at $33.20 in the pre-market session Friday. Centrica OTC shares closed 2.86% lower at $0.51 on Thursday.
Photo credit: Centrica plc
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