(Reuters) -NRG Energy said on Monday it would acquire power generation assets from energy infrastructure investment firm LS Power in a deal valued at $12 billion, as the U.S. utility bets on surging electricity demand, sending its shares up more than 17% in early trading.
The U.S. Energy Information Administration expects power consumption in the country to reach record highs in 2025, driven by a proliferation of data centers dedicated to AI and cryptocurrency as well as homes and businesses consuming more electricity.
NRG said the new assets include natural gas generation facilities and a virtual power plant, which integrates multiple resources to provide power to the grid.
The deal, expected to close in the first quarter of 2026, would double NRG’s generation capacity to 25 gigawatts (GW), adding 18 natural gas-fired facilities totaling 13 GW across key markets in the Northeast and Texas, NRG said.
“We are in the early stages of a power demand supercycle,” CEO Larry Coben said.
In February, NRG signed letters of intent with two data center developers to supply up to 400 megawatts of retail power in the initial phase. NRG is also working with GE Vernova to develop up to 5.4 GW of new natural gas projects.
NRG will fund $6.4 billion of the LS Power deal in cash and $2.8 billion in stocks to LS Power. It would also assume $3.2 billion of net debt at deal close and will receive around $400 million in tax benefits from the transaction.
As of March 31, NRG’s long-term net debt stood at $9.81 billion.
The acquisition would be immediately accretive to earnings per share, NRG said. It now expects long-term compounded annual growth rate of 14% for per share profit, compared with its prior view of 10%.
NRG also reported a rise in first-quarter profit on Monday. Its net income rose to $750 million for the three months ended March 31, compared with $511 million a year earlier.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Sahal Muhammed and Krishna Chandra Eluri)
