Talen Energy to buy three power plants for $1.18 billion

• 9 years ago (2015-07-21)
• David Flin

North America 1021

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Talen Energy of the USA has announced an agreement to acquire MACH Gen, which owns over 2500 MW of combined cycle, natural gas-fired generating capacity for $1.175 billion, inclusive of any assumed debt, subject to purchase price adjustments.

Talen Energy has agreed to acquire the following combined cycle, gas-fired power plants: the 1080 MW Athens plant in New York state; the 360 MW Millennium plant in Massachusetts; and the 1092 MW Harquahala plant in Arizona.

Paul Farr, President and CEO of Talen Energy, said: “The negotiated deal represents a significant step in the execution of our growth strategy, and provides meaningful improvement in our cash flow profile. The transaction adds highly competitive combined cycle gas assets in New York and the North East USA, two mature and liquid wholesale power markets, with the opportunity to create significant value by optimising a very efficient gas-fired plant in Arizona.”

Pending the required regulatory approvals, the transaction is expected to close by the end of 2015. When the transaction closes, Talen Energy’s total generating capacity will increase to 17,600 MW, before the required sale of about 1300 MW to meet a Federal Energy Regulatory Commission mitigation order related to the transaction that created Talen Energy.

Talen Energy expects to finance the transaction with a combination of debt and cash. The final financing plan will take into consideration market conditions and the amount of existing MACH Gen debt to be assumed, as well as expected proceeds from FERC mitigation sales and other pending divestitures.