NRG Energy has announced plans to acquire a substantial 13 gigawatts (GW) of natural gas-fired power plants and a prominent commercial and industrial virtual power plant (C&I VPP) platform from LS Power. The cash-and-stock transaction, valued at $12 billion in enterprise value, will substantially expand NRG’s generation portfolio.
The deal, expected to finalize in the first quarter of 2026, will double NRG’s generation capacity to 25 GW, with the new assets primarily located in Texas and the Northeast—two regions where the company already has a strong retail presence. This strategic acquisition positions NRG to take advantage of the growing U.S. energy demand and the tightening balance between power supply and demand.
Strengthening NRG’s Position in the Energy Market
“This acquisition transforms NRG’s generation fleet and broadens our customized product offerings,” said Larry Coben, NRG’s Chair, President, and CEO. “We are in the early stages of a power demand supercycle, and we are excited to lead the way with reliable energy solutions that will drive considerable value for NRG and all of our stakeholders.”
The acquisition includes 18 modern, natural gas-fired facilities, which NRG says will enhance its operational flexibility, reduce the cost-to-serve, and simplify risk management. Many of these assets were expanded and redeveloped by LS Power. After the deal, LS Power will retain approximately 10 GW of generation assets, including natural gas, renewables, and storage.
Additionally, NRG will gain full ownership of CPower, LS Power’s demand response platform for commercial and industrial customers. CPower aggregates 6 GW of flexible capacity from over 2,000 commercial clients. This acquisition will allow NRG to offer integrated demand-side solutions, enhancing its ability to meet long-term supply contracts with major industrial customers and data centers.
Financial Benefits and Growth Projections
NRG expects the acquisition to be immediately accretive to earnings, projecting a 7.5x EV/EBITDA multiple based on 2026 forecasts. The deal is expected to be nearly half the cost of constructing new assets. As a result, NRG has raised its long-term earnings growth target from 10% to at least 14% compound annual growth rate (CAGR), reflecting the strategic value of this acquisition.
The company plans to return $9.1 billion in capital to shareholders over the next five years through share repurchases and dividends, including $1.3 billion in 2025. NRG aims to achieve an investment-grade leverage ratio of below 3.0x Net Debt to Adjusted EBITDA within 24 to 36 months after the deal closes.
To finance the acquisition, NRG will pay $6.4 billion in cash, issue $2.8 billion in stock to LS Power, and assume $3.2 billion in net debt. Following the transaction, LS Power will own about 11% of NRG’s outstanding shares, though its voting control will be limited to under 10%.
Enhancing Grid Reliability and Market Stability
This acquisition highlights continued investment in dispatchable thermal generation, especially in regions experiencing high demand growth, increased reliance on renewable energy, and challenges in building new fossil generation capacity. As power markets become more constrained, NRG’s expanded platform, which includes both physical and virtual generation resources, will play a key role in maintaining grid reliability and supporting price stability.
Paul Segal, CEO of LS Power, called the sale a “significant milestone,” emphasizing that the portfolio had been carefully developed to serve regions with the highest demand growth and market value. “These projects, along with CPower, will continue to provide critical services to the grid, enhancing both its resilience and affordability,” Segal said.
This acquisition is set to strengthen NRG’s role in the evolving U.S. energy market while delivering enhanced capabilities for meeting the country’s future energy needs.
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