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NRG Energy Inc. announced it has reached a definitive agreement to acquire a portfolio of natural gas generation assets and a commercial and industrial virtual power plant (C&I VPP) platform from LS Power for an enterprise value of approximately $12 billion. The deal includes both cash and common stock, reflecting a multiple of 7.5 times projected 2026 EV/EBITDA and about 50% of the estimated cost to build comparable assets from scratch.

The acquisition significantly expands NRG鈥檚 generation capacity, doubling it to approximately 25 gigawatts (GW) with the addition of 13 GW across 18 natural gas-fired facilities located in nine states. This expansion strengthens NRG鈥檚 presence in core markets such as Texas and the Northeast.

NRG will also acquire CPower, LS Power鈥檚 C&I VPP platform, which operates across all deregulated U.S. energy markets. CPower serves more than 2,000 customers and manages roughly 6 GW of capacity.

鈥淭his acquisition transforms our generation fleet and enhances our tailored energy offerings,鈥� said Larry Coben, NRG鈥檚 chair, president and CEO. 鈥淚t positions us to deliver greater value for customers and shareholders, especially as we enter a period of growing power demand.鈥�

Paul Segal, CEO of LS Power, noted the portfolio鈥檚 strategic development over time and its critical role in supporting energy grid reliability. 鈥淲e are confident NRG will continue that legacy and deliver long-term value,鈥� he said.

Strategic Impact and Financial Upside

The deal is expected to be immediately accretive to NRG鈥檚 adjusted earnings per share. The company has raised its long-term adjusted EPS growth target to at least 14% annually, up from the previous 10%, driven by the visibility of sustained growth opportunities. NRG also expects to return approximately $9.1 billion to shareholders through dividends and share repurchases over the next five years.

The acquisition enhances NRG鈥檚 strategic flexibility in meeting surging demand鈥攅specially from data centers鈥攖hrough fast-start generation assets and expanded grid support via CPower鈥檚 VPP capabilities. It also adds over 1 GW of potential generation upgrades and new development sites.

Strengthened Financial Position

Post-transaction, NRG aims to improve its investment-grade credit profile with a net debt-to-adjusted EBITDA target below 3.0x. The company expects strong cash flows will help achieve that target within 24 to 36 months after closing.

Transaction Details and Approvals

The $12 billion enterprise value includes $6.4 billion in cash, $2.8 billion in NRG stock (about 24.25 million shares), and $3.2 billion in assumed net debt, offset by $400 million in tax benefits. LS Power will hold roughly 11% of NRG鈥檚 outstanding shares post-closing, with a 6-month lock-up and limited voting rights.

The deal is expected to close in Q1 2026, pending regulatory approvals from the FERC, HSR, and New York PSC.