NRG Energy (NRG.N) announced on Monday that it will acquire power generation assets from energy infrastructure investment firm LS Power in a deal valued at $12 billion. This acquisition sends NRG’s shares soaring more than 24%, reaching an all-time high of $148.30. The move comes as NRG Energy bets on the surging electricity demand driven by the explosive growth of AI, crypto-driven data centers, and rising consumption in homes and businesses.
Strategic Move to Meet Growing Power Demand
With U.S. power demand projected to hit record highs in 2025, NRG Energy is positioning itself to capitalize on the growing need for electricity. The company’s CEO, Larry Coben, described the acquisition as part of their strategy to prepare for the “early stages of a power demand supercycle.” The deal will allow NRG to expand its generation capacity significantly.
Doubling Generation Capacity and Expansion into Key Markets
As part of the acquisition, NRG will double its generation capacity to 25 gigawatts (GW), focusing on key markets in the Northeast and Texas. Additionally, the deal includes a virtual power plant that integrates multiple resources to provide power to the grid. The deal also diversifies NRG’s portfolio, especially by expanding in the PJM, the largest U.S. power market operating across 13 states in the Mid-Atlantic and Midwest regions. Notably, this area includes northern Virginia, the world’s largest data center hub.
Strategic Benefits and Future Growth
According to S&P Global Ratings, NRG’s increased exposure to PJM is expected to benefit the company due to rising price trends in the region. NRG has been making a series of strategic moves to position itself for future growth, including acquiring Rockland’s 738 MW natgas assets in March and entering into supply deals with data center developers. The company is also collaborating with GE Vernova (GEV.N) to develop up to 5.4 GW of new natural gas capacity.
Financing the Deal and Future Earnings Growth
NRG will finance the LS Power acquisition with $6.4 billion in cash, $2.8 billion in stock, and by assuming $3.2 billion in net debt. Additionally, the company expects to realize $400 million in tax benefits. Following the deal’s closure in the first quarter of 2026, NRG is targeting a $3.7 billion debt reduction. NRG also forecasts a long-term compounded annual growth rate of 14% for earnings per share, an increase from the previous target of 10%.
Solid Financial Performance in Q1
NRG also reported a strong first-quarter profit, with net income rising nearly 47% from the same period last year, reaching $750 million. The company’s strong financial performance and strategic acquisitions have positioned it for continued growth in the energy sector.
