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US: Energy giants Vistra and Dynegy close to merger deal

 |  October 26, 2017

Two Texas power companies, Vistra Energy of Dallas and Dynegy of Houston, are close to making a deal to merge, according to news reports.

The Wall Street Journal, citing unnamed sources, said the two companies could announce a deal as soon as next week. The combination would create the nation’s biggest independent power company.

Both companies declined to comment on the report to the WSJ, but Vistra’s recent decisions to shutter three Texas coal-fired power plants and lay off more than 800 workers led industry analysts to speculate that the company was shedding unprofitable assets to prepare for such a merger. Vistra, which produces the most power in Texas, said the decision was driven by unfavorable economics of operating coal-fired plants.

If completed, the merger would be another example of how low electricity rates, higher costs and increased competition from renewable generators are reshaping the power industry as companies struggle to stay profitable. Calpine, a Houston company, sold itself to a consortium led by a New Jersey private equity firm while NRG, also of Houston, is divesting some US$4 billion in assets, which has led to nationwide lay offs.

Full Content: Wall Street Journal

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