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New Jersey based NRG Energy announces business merger

NRG Energy, Inc. based in Princeton, New Jersey, has announced it is buying GenOn Energy, Inc. The business merger is set to close in the first quarter of 2013. NRG's acquisition of GenOn will push NRG to the head of pack as the largest independent power company in the United States.

The CEOs of NRG and GenOn have indicated that by acquiring GenOn, NRG will significantly increase its operations while keeping costs low. They go on to say that this combination will put NRG in prime position when energy prices rebound. The sale has yet to be approved by shareholders of both companies and the applicable government agencies.

Both companies hope this merger will result in significant savings through the combination and streamlining of each company's current operations over the next couple of years. Indications are that this strategy could result in saving in the area of $300 million. Of course, these savings may not be enough to substantiate the merger if energy prices don't rebound as predicted.

Anytime New Jersey companies contemplate a business merger, there are risks, and what potentially minimizes those risks is research and planning. Knowing the market, the compatibility of operations of each business, and the business and legal issues regarding a potential merger are critical. Each company has to provide the other with a benefit that outweighs the risks involved, and analyzing the potential benefits of a merger is just as important as researching the risks. Once the research and planning is done, both companies have to get down to practical business and legal issues. This is where having access to the appropriate advice can make the transition as smooth and seamless as possible.

Source: Nj.com, "Princeton's NRG Energy to buy GenOn for $1.7 billion, become power market leader," July 23, 2012

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