H ouston-based Dynegy Inc. (NYSE: DYN) announced it will acquire five coal-fired power plants in Illinois as a part of a definitive agreement to take over Ameren (NYSE:AEE) subsidiary, Ameren Energy Resources (AER) and all of its units.
Included in the transaction are AER’s retail and marketing businesses and the Duck Creek, Coffeen, E.D. Edwards, Newton, and Joppa power plants.
Under the terms of the agreement, Dynegy will not pay cash to acquire AER through a newly formed subsidiary, Illinois Power Holdings (IPH), which will operate the Illinois plants assuming their $850 million in debt.
Further, Ameren will pay at least $133 million to repurchase three natural gas-fired plants that belong to one of the AER units included in the deal.
Upon closing, Dynegy said it will own more than 8,000 megawatts (MW) of generating capacity in Illinois, and nearly 14,000 MW nationally.
The transaction is subject to regulatory authorizations, including approval from the Federal Energy Regulatory Commission, and other customary conditions. Both companies expect to close the transaction during the fourth quarter of 2013.