Mirant and RRI merge into GenOn
By Harry R. Weber |
April 13, 2010, Tuesday
|
Print Edition
Print Edition
UNITED States energy providers Mirant Corp and RRI Energy Inc said on Sunday they are combining in a US$1.61 billion stock-swap deal, renaming the company and creating a utility powerhouse that will become one of the America's largest independent power producers.
The combined company, which will have a market capitalization of about US$3.1 billion, will be called GenOn Energy. It will bring together roughly 24,650 megawatts of electric generating capacity, operations from coast to coast and have total revenue of US$4.13 billion, based on full-year 2009 figures.
GenOn will be led by Mirant Chairman and CEO Edward R. Muller until 2013, when he will retire and the top post will be taken by Mark M. Jacobs, RRI Energy's current president and CEO. Jacobs will serve as GenOn's president, chief operating officer and a director until then.
There likely will be job cuts among the two companies' 3,600 employees, but how many has not been decided, Jacobs told The Associated Press. Muller, who has been Mirant CEO since 2005, said that once he retires he has no plans to head another major company.
Mirant stockholders will receive 2.835 RRI common shares for each Mirant share they own. Based on RRI's last Friday closing price of US$3.95, that values Mirant at US$11.20 per share - a 4 percent premium. Based on Mirant's 143.9 million shares outstanding at March 8, the deal values Atlanta-based Mirant at US$1.61 billion.
Mirant stockholders will own roughly 54 percent of the combined company, while shareholders of RRI Energy will own roughly 46 percent.
The two companies said they expect US$150 million in annual cost savings starting in January 2012 from reductions in corporate overheads.
The combined company, which will have a market capitalization of about US$3.1 billion, will be called GenOn Energy. It will bring together roughly 24,650 megawatts of electric generating capacity, operations from coast to coast and have total revenue of US$4.13 billion, based on full-year 2009 figures.
GenOn will be led by Mirant Chairman and CEO Edward R. Muller until 2013, when he will retire and the top post will be taken by Mark M. Jacobs, RRI Energy's current president and CEO. Jacobs will serve as GenOn's president, chief operating officer and a director until then.
There likely will be job cuts among the two companies' 3,600 employees, but how many has not been decided, Jacobs told The Associated Press. Muller, who has been Mirant CEO since 2005, said that once he retires he has no plans to head another major company.
Mirant stockholders will receive 2.835 RRI common shares for each Mirant share they own. Based on RRI's last Friday closing price of US$3.95, that values Mirant at US$11.20 per share - a 4 percent premium. Based on Mirant's 143.9 million shares outstanding at March 8, the deal values Atlanta-based Mirant at US$1.61 billion.
Mirant stockholders will own roughly 54 percent of the combined company, while shareholders of RRI Energy will own roughly 46 percent.
The two companies said they expect US$150 million in annual cost savings starting in January 2012 from reductions in corporate overheads.
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