NRG shares rise 4.7% after $4 billion sale of six gas plants

NRG shares rose 4.7% at 9:40 a.m. ET, from an $88.29 close.

NRG Energy (NRG) agreed to sell six natural gas generation assets to an affiliate of LS Power for $4 billion in cash, subject to customary price adjustments.

The purchase price implies 8.0x 2027 EV/Adj. EBITDA.

The six assets represent 4.9 GW of generation in three grid regions: Ravenswood in NYISO, Ocean State Power and Wallingford in ISO-NE, and Jack County, Johnson County and R.W. Miller in ERCOT.

Upon completion, NRG will own and operate 20 GW of generation capacity, with 10 GW in ERCOT and 10 GW in PJM. An additional 1.1 GW is expected to be operational in ERCOT by 2028 through the company's remaining two Texas Energy Fund projects.

Use of proceeds

Proceeds will support a 2027 pro forma capital allocation plan of $3 billion in share repurchases across 2026 and 2027, including an incremental $1 billion expected to begin before the end of the fourth quarter of 2026.

Upon closing, NRG plans an additional $2 billion of debt reduction to maintain its current leverage profile, bringing planned 2027 debt reduction to $3 billion. The remaining proceeds will be reserved to fund contracted growth investments or additional debt reduction.

Closing conditions

The sale is targeted to close in the second quarter of 2027, subject to customary conditions and regulatory approvals, including Hart-Scott-Rodino clearance, the Federal Energy Regulatory Commission and the New York State Public Service Commission.