Atlanta and Houston, April 12, 2010 – Mirant Corp. and RRI Energy agreed to create GenOn Energy, which will be one of the largest independent power producers in the U.S., with about 24,700 MW of electric generating capacity and a pro forma market capitalization of $3.1 billion.
The transaction is structured as an all-stock, tax-free merger. Under the terms of the merger agreement, which has been approved unanimously by the boards of directors of both companies, Mirant stockholders will receive a fixed ratio of 2.835 shares of RRI Energy common stock for each share of Mirant common stock they own.
Upon closing, which is expected before the end of 2010, Mirant stockholders will own about 54 percent of the equity of the combined company and RRI Energy stockholders will own about 46 percent.
Edward R. Muller, chairman and chief executive officer of Mirant, will be chairman and CEO of the combined company until 2013, when he plans to retire.
Mark M. Jacobs, president and chief executive officer of RRI Energy, will be president and chief operating officer of GenOn and will serve on its board. Jacobs is to succeed Muller as CEO in 2013.
J. William Holden III, currently chief financial officer of Mirant, will be chief financial officer of GenOn.
The GenOn Board of Directors will be comprised of 10 directors, with five members of the current Mirant Board and the five members of the current RRI Energy Board. GenOn’s corporate headquarters will be located in Houston.
The merger brings together two organizations with complementary electric generation assets and proven operational excellence, enabling GenOn to derive substantial near- and long-term benefits from cost savings, greater scale, geographic diversity, and increased financial strength and flexibility.
GenOn will have a strategically balanced presence across key regions, including the Mid-Atlantic, California, the Northeast, the Southeast and the Midwest.
“Bringing together RRI Energy and Mirant is a true merger of equals, combining two companies with complementary strengths, a shared strategic vision and a commitment to value creation,” Muller said. “This compelling combination will create tremendous value for stockholders of both companies as our business benefits from cost savings, greater scale, and enhanced financial strength and flexibility.”
“We are committed to delivering the cost savings benefits and successfully integrating Mirant and RRI Energy,” Jacobs said. “We will bring together the best operating practices from both organizations, building on our excellent track records.”
The combined fleets are largely complementary, with limited overlap in their respective operating regions. The transaction is subject to customary closing conditions, including approval by the stockholders of RRI Energy and Mirant, U.S. antitrust approval and approval by the Federal Energy Regulatory Commission. The closing is also subject to the refinancing of a portion of each company’s existing debt.
Mirant is a competitive energy company that produces and sells electricity in the U.S. Mirant owns or leases more than 10,000 MW of electric generating capacity.
RRI Energy, Inc., based in Houston, provides electricity to wholesale customers in the U.S. The company is one of the largest independent power producers in the nation with more than 14,000 MW of power generation capacity across the U.S. These strategically located generating assets use natural gas, fuel oil and coal.