NRG Energy buys Texas nuclear power firm

6 October 2005

Texas Genco Holdings has entered into a definitive agreement for NRG Energy to acquire all its outstanding equity for approximately $5.8 billion in a cash and stock deal. In addition, NRG will assume approximately $2.5 billion of Texas Genco debt.

With approximately 14% of the aggregate net generation capacity, Texas Genco is the second largest generation company within the Electric Reliability Council of Texas (ERCOT), including its 44% interest in the 1127MWe South Texas Project nuclear plant commissioned in 1988-1989.

The move, comprised of approximately $4 billion in cash and $1.8 billion in common and preferred stock, would nearly double NRG's asset base and give it entry to the growing Texas wholesale electricity market.

With the Texas Genco alliance, NRG claims to have the broadest geographic reach of any independent power producer in the US with a significant presence in the key competitive wholesale power markets, including the Northeast, South Central, California and Texas. The combined portfolio will comprise approximately 23,920MWe.

"Texas Genco is an ideal strategic fit with NRG," said David Crane, NRG's president and CEO.

NRG expects the transaction to be immediately and significantly accretive to both earnings per share and cash flow per share following closure of the transaction, which is expected to be financed through a combination of debt and equity.

NRG expects to close the transaction during the first quarter of 2006, subject to regulatory approvals.

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