American power utility firm Talen Energy is set to acquire private producer Mach Gen for $1.18bn, in order to expand its power generation capacity.
The deal will transfer ownership of three gas-fuelled power plants to Talen Energy, which has locations in the US states of New York, Massachusetts and Arizona.
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The purchase will add more than 2.5GW of power generation capacity to Talen’s portfolio, raising it to 17.6GW.
This transaction is subject to regulatory approvals and expected to close by the end of this year.
Talen Energy president and CEO Paul Farr said: "This negotiated deal represents a significant step in the execution of our growth strategy, and provides meaningful improvement in our cashflow profile.
"The transaction adds highly competitive combined cycle gas assets in NYISO and ISO-NE, two mature and liquid wholesale power markets, with the opportunity to create significant value by optimising a very efficient gas-fired plant in Arizona."
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By GlobalDataTalen Energy was formed in 2014 as spinoff from Pennsylvania Power and Light (PPL).
Launched in June this year, the entity holds ownership rights for 11 former PPL-owned power facilities, along with 13 more that were formerly under Riverstone Holdings.
Citi has served as financial advisor to Talent and offered debt financing for this acquisition.
