Electric utility Dynegy (NYSE: DYN) announced today that the Federal Energy Regulatory Commission signed off on its wholly owned special purpose entity Illinois Power Holdings to acquire Ameren Energy Resources, a subsidiary of Ameren (AEE -0.48%), an electric and natural gas utility based in St. Louis.
Upon completion of the transaction, which is expected by the end of the year, but is contingent upon receiving the Illinois multi-pollutant standard variance request that is currently before the Illinois Pollution Control Board, or IPCB, Dynegy will own more than 8,000 megawatts of generating capacity in Illinois, and nearly 14,000 megawatts nationally. Also included in the deal is AER's marketing and Homefield Energy retail businesses, and several plants.
Coming with AER to Dynegy will be its subsidiaries Ameren Energy Generating, or Genco; Ameren Energy Resources Generating, or AERG; and Ameren Energy Marketing Company, or AEM.
As part of the transaction, for which there is no cash trading hands or stock being issued, the $825 million Genco has in existing debt will follow it to Dynegy, but AER and its subsidiaries will be transferred at closing with $226 million in cash, $160 million in working capital, and two years of credit support from Ameren.
Ameren will purchase Genco's Elgin, Grand Tower, and Gibson City natural gas-fired generation plants for a guaranteed minimum price of $133 million and will ensure Genco has a minimum of $93 million of cash when it's transferred.
Dynegy and Ameren anticipate that the IPCB will make its decision on the variance request before Nov. 21.
