Constellation Energy to Buy Stake in Texas Nuclear Plant in $1.75 Billion Deal
(Reuters) — Utility firm Constellation Energy Corp. said on Thursday it would acquire NRG Energy Inc.'s stake in a nuclear plant in Texas in a deal valued at $1.75 billion.
After the transaction, Constellation will be one of three owners of the 2,645-megawatt (MW) Texas Project Electric Generating Station.
NRG's 44% interest represents about 1,100 MW of output. Constellation operates 3,520 MW of natural gas-fired power plants in Texas and a couple of wind projects.
Shares of NRG fell 3.4%, while Constellation gained 4.7% in afternoon trade.
The sale represents further reduction of NRG's power generation portfolio and a shift in focus to its retail customers which is "somewhat incongruent with recent investor activism", brokerage Guggenheim said in a note.
Activist investor Elliott Investment Management LP had asked NRG last month to unwind its recent acquisition of home security firm Vivint Smart Home Inc.
Texas has been plagued with power grid issues following a deadly deep freeze in February 2021 that caused key components of the state's electrical system to fail.
The state has since seen a flurry of investments related to battery storage, with the lure of high returns.
Constellation said the NRG deal would be financed with a combination of cash and debt and the transaction is expected to close by the end of the year.
Separately, NRG said Bruce Chung would take over from Alberto Fornaro as the company's chief financial officer, effective Thursday.
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