Dynegy to Acquire Ameren Energy Resources, Expanding Illinois Portfolio

Transaction highlights:

• Dynegy to acquire 4,119 MW of generation and AER‘s marketing and Homefield Energy retail businesses through Illinois Power Holdings, a newly formed, non-recourse subsidiary (with the exception of a $25 million limited guarantee)
• Ameren, through the Genco put option, to purchase 1,166 MW of gas-fired generation from Genco prior to closing for a minimum of $133 million
• No cash consideration for the acquisition of AER and its consolidated subsidiaries; $825 million in existing Genco debt remains a Genco obligation
• AER and consolidated subsidiaries to be transferred at closing with $226 million in cash, $160 million in working capital, and two years of credit support from Ameren
• More than $60 million of expected annual synergies by 2015
• Existing transmission rights to PJM to remain in place
• Expected to be accretive to Adjusted EBITDA in 2014 and Free Cash Flow by 2015

HOUSTON–(BUSINESS WIRE)– Dynegy Inc. (NYS: DYN) and Ameren (NYS: AEE) announced today they have signed a definitive agreement under which Dynegy’s subsidiary Illinois Power Holdings, LLC (IPH) will acquire Ameren’s subsidiary, Ameren Energy Resources (AER) and its subsidiaries Ameren Energy Generating Company (Genco), AmerenEnergy Resources Generating Company (AERG), and Ameren Energy Marketing Company (AEM). Upon closing, Dynegy will own more than 8,000 megawatts (MW) of generating capacity in Illinois, and nearly 14,000 MW nationally. The AER retail and marketing businesses and the following plants are included in the transaction: Duck Creek, Coffeen, E.D. Edwards, Newton, and Joppa.

“The acquisition of AER is expected to create significant value for Dynegy shareholders by building upon our existing scale in one of our key markets with assets similar to our Illinois-based CoalCo portfolio. We are uniquely positioned to create significant synergies that will benefit AER and our CoalCo and GasCo businesses. AEM also brings to Dynegy an established retail business with significant scale that complements both portfolios,” said Robert C. Flexon, Dynegy President …read more
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