Market Overview

Dynegy To Buy Energy Capital Partners' Stake In Atlas Joint Venture


Dynegy Inc. (NYSE: DYN) revealed Wednesday its intention to buy Energy Capital Partners' (ECP) 35% stake in the Atlas joint venture (JV) that the two companies formed in February to acquire ENGIE's 9,058 megawatt U.S. fossil portfolio. The total cost involved in buying the stake was $750 million. According to the company, after the completion of the ENGIE portfolio acquisition, it would own 100% of the acquired business.

Dynegy said that as per the agreement terms, the total transaction value would be based on the expectations that the transaction closes on October 1 current year. The company disclosed that when the Atlas JV was originally established, ECP provided Dynegy with the option to acquire its 35% interest in the JV using a predetermined methodology that included a minimum floor price of 2.25x ECP's net investment in the venture.

The company's President and CEO, Robert Flexon, commented, "As we indicated in February, Dynegy's intent has consistently been to fully own the ENGIE U.S. fossil portfolio. The significant improvement in the financial markets since announcing the transaction in February provided an excellent opportunity for us to approach ECP about an earlier timetable. This transaction accelerates our company's transformation, enabling us to increase our presence further in the most desirable markets with high quality assets."

Dynegy said that post-closing, the integrated unit would have about 34,700 MW of generation assets with a presence in all major competitive markets in the U.S. The company added that its fleet continued to undergo a significant transition with the addition of ENGIE's U.S. fossil portfolio and the previously announced shutdown of various coal units, resulting in a portfolio that is 71% gas and 29% coal by year-end 2017.

On Tuesday, the stock shed 7.11 percent.

Posted-In: News M&A


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