Talen Energy Corp. struck a deal to buy MACH Gen, which owns more than 2,500 MW of combined-cycle, natural gas-fired generating capacity, for $1.175 billion inclusive of any assumed debt, subject to customary purchase price adjustments.
Pending required regulatory approvals, the transaction is expected to close by the end of 2015.
When the transaction closes, Talen Energy’s total generating capacity will increase to 17,600 MW, before the required sale of about 1,300 MW to meet a Federal Energy Regulatory Commission mitigation order related to the transaction that created Talen Energy.
Talen Energy expects to finance the transaction with a combination of debt and cash. The final financing plan will take into consideration market conditions and the amount of existing MACH Gen debt to be assumed, as well as expected proceeds from FERC mitigation sales and other pending divestitures.
Citi served as financial advisor to Talen Energy. Talen Energy has obtained committed debt financing from Citi in an amount sufficient to fund the purchase price. Bracewell & Giuliani LLP was transaction counsel for Talen Energy. Simpson Thacher & Bartlett LLP was finance counsel for Talen Energy.