By Editors of Power Engineering
Previous speculation concerning Vistra and Dynegy was on the money, as the two companies announced they plan to merge.
The boards of directors of both companies approved an all-stock merger plan that would give Dynegy shareholders 0.652 shares of Vistra Energy stock for each share of Dynegy common stock they own, creating a single company projected to have a combined market capitalization of over $10 billion.
In the joint press release, the companies said the merger would combine Dynegy’s generating capacity and retail footprint with Vistra’s integrated ERCOT model, creating the lowest-cost integrated power company in the industry and position the company as the leading integrated retail and generation platform throughout key competitive power markets in the U.S.
The combined company would serve 240,000 commercial customers and 2.7 million residential customers in five states, and own 40 GW of generating capacity.
“This combination represents a transformative opportunity to create the leading integrated power company in the United States,” said Curt Morgan, Vistra Energy president and CEO. “Combining Vistra Energy’s leading retail and commercial operations with Dynegy’s leading CCGT fleet and geographically diverse portfolio is expected to create a company with significant earnings diversification and scale.
“Our combination with Vistra Energy accelerates Dynegy’s strategic initiatives of strengthening our balance sheet while creating the preeminent integrated power company,” said Dynegy president and CEO Bob Flexon. “Vistra Energy’s strength in retail combined with Dynegy’s infrastructure and generation capabilities will provide an unmatched, highly efficient integrated business in key competitive markets.
Curt Morgan will lead the combined company as president and CEO, with a board consisting of the current eight members of the Vistra Energy board and three members from Dynegy’s board. Bob Flexon will continue to serve as president and CEO of Dynegy through April 30, 2019 or the date the transaction closes, whichever comes first.
The transaction is expected to close in the second quarter of 2018.