M&A News: NRG Energy Stock Surges 26% on $12B Power Acquisition

NRG Energy (NRG) stock surged 26.2% on Monday, as the company announced an agreement to acquire LS Power Equity Advisors, LLC’s portfolio of natural gas generation facilities and CPower, a commercial and industrial virtual power plant platform, in a cash and stock deal worth about $12 billion in enterprise value. Investors welcomed the deal, as the U.S. power demand is expected to reach record highs in 2025 due to the high electricity needs of artificial intelligence (AI) and crypto-driven data centers.

The purchase price of this deal includes $6.4 billion in cash, $2.8 billion in stock, and $3.2 billion in net debt, net of about $400 million in tax benefits. The deal is expected to close in the first quarter of 2026, subject to regulatory approvals.

Along with the announcement of the strategic deal, NRG Energy also announced market-beating results for the first quarter of 2025, driven by solid demand for power amid the ongoing AI wave.  

NRG Bolsters Power Portfolio

The NRG-LS Power deal would double NRG’s power generation capacity with the addition of 18 natural gas-fired facilities boasting a capacity of 13 GW. These facilities are located across nine states and will expand NRG’s power generation footprint in the Northeast and Texas.

Meanwhile, CPower, which operates in deregulated energy markets, will help NRG gain about 6 GW of capacity, representing more than 2,000 commercial and industrial customers. Overall, the acquisition will double NRG’s power generation capacity to 25 GW.

Meanwhile, the acquisition is expected to be immediately accretive to NRG’s adjusted earnings per share (EPS). Consequently, NRG raised its long-term compounded annual growth rate (CAGR) target for adjusted EPS to at least 14% from the current target of at least 10%, without the inclusion of upside opportunities such as data centers or increased pricing from tightening markets. The company expects to return about $9.1 billion of capital to NRG shareholders through share repurchases and common dividends over this period.

NRG CEO Larry Coben believes that this acquisition transforms the company’s power generation fleet and enhances its customized product offerings. He added that the deal is “financially compelling,” as it bolsters NRG’s credit profile, while also supporting solid capital returns. NRG has been strengthening its positioning with several strategic deals. It acquired 738 MW natural gas assets in March from Rockland and signed supply deals with two data center developers earlier this year. NRG is also collaborating with GE Vernova (GEV) to develop up to 5.4 GW of new natural gas capacity.

Is NRG Energy a Good Stock to Buy?

With five Buys and two Holds, NRG Energy stock scores a Moderate Buy consensus rating on TipRanks. The average NRG stock price target of $130.14 implies about 13.6% downside risk. The stock has rallied by an impressive 67% year-to-date.

Analysts’ ratings and price targets might change in reaction to the company’s stellar Q1 performance and the acquisition of LS Power’s natural gas assets.

See more NRG analyst ratings