NRG Energy Stock Surges 26% on $12 Billion Acquisition of LS Power's Natural Gas Assets

NRG Energy has acquired LS Power's natural gas assets and CPower in a $12 billion deal, doubling its power generation capacity to 25 GW. The acquisition is expected to be immediately accretive to NRG's adjusted EPS and raise its long-term CAGR target for adjusted EPS to at least 14%. NRG raised $9.1 billion for share repurchases and common dividends over the next period.

NRG Energy, Inc. (NYSE: NRG) has entered into a definitive agreement to acquire a portfolio of natural gas generation facilities and CPower, Inc. from LS Power Development, LLC for approximately $12.0 billion. The transaction, valued at $12.0 billion, includes a $6.4 billion cash consideration, $2.8 billion in stock consideration, and the assumption of $3.2 billion in net debt. The acquisition is expected to close in the first quarter of 2026, subject to customary closing conditions and regulatory approvals [1].

The acquisition includes 13 GW of premier natural gas-fired generation and the leading C&I VPP business with 6 GW of capacity. This strategic move will double NRG's power generation capacity to 25 GW, enhancing its ability to serve customers and drive long-term value for shareholders. The acquisition is expected to be immediately accretive to NRG's Adjusted Earnings Per Share (EPS) and raise its long-term Compound Annual Growth Rate (CAGR) target for adjusted EPS to at least 14% [1].

NRG Energy has also announced its plans to raise $9.1 billion for share repurchases and common dividends over the next period. The company plans to return $1.3 billion in share repurchases and common stock dividends of approximately $345 million in 2025 [2]. This capital allocation strategy is designed to maintain and improve NRG's financial health and shareholder value.

The acquisition is part of NRG's broader strategy to increase its gearing in response to tightening power markets and to better take advantage of the demand supercycle. The company's first quarter 2025 results showed strong financial and operational performance, with GAAP Net Income of $750 million, GAAP EPS of $3.70, and Adjusted Net Income of $531 million [2].

NRG Energy's acquisition of LS Power's natural gas assets and CPower is a significant step forward in the company's growth strategy. By doubling its power generation capacity, NRG is well-positioned to capitalize on the growing demand for natural gas and other renewable energy sources. The acquisition is expected to have a positive impact on NRG's financial performance and shareholder value.

References:
[1] https://www.marketscreener.com/quote/stock/NRG-ENERGY-INC-13792/news/NRG-Energy-Inc-entered-into-a-definitive-agreement-to-acquire-Portfolio-of-Natural-Gas-Generation-49914290/
[2] https://investors.nrg.com/news-releases/news-release-details/nrg-energy-inc-reports-first-quarter-2025-results-and-reaffirms