NRG is planning to purchase energy supplier Direct Energy for $3.6 billion.
Houston-based Direct Energy, one of North America’s leading providers of electricity, natural gas, and energy services for homes and businesses, has been a subsidiary Centrica PLC since 2000, which has is operated out of London.
The purchase will add Direct Energy to the expanding portfolio of NRG, which has its dual headquarters in New Jersey and Houston.
This deal, which is slated to be finalized by the end of 2020, was announced on July 24th and will make NRG one of the largest retail suppliers in the United States.
According to NRG’s press release, the strategic and financial benefits of the deal include:
- The broadening of NRG’s retail business into other areas of the country, which will help them reduce retail costs
- Balancing NRG’s generation and retail platform by utilizing Direct Energy’s footprint in the East
- Expanding NRG’s ability to offer their renewable PPA strategy outside of Texas
- Significant cost and operational synergies
- Disciplined capital allocation
"The acquisition aligns with our broader strategy of perfecting our integrated business model and drives significant value creation for our customers and stakeholders. Direct Energy ’s complementary assets, talented team and excellent customer service make it a natural fit for our portfolio, and we look forward to welcoming Direct Energy to the NRG team."
Best Practice Energy’s Take
We don’t expect to see any changes for our clients that are currently under Direct Energy contracts or have any future contracts with them. There will also be no changes to the billing or energy supply of these clients.
The deal will mainly just be expanding NRG’s footprint by adding more than 3 million retail customers across the entire United States and parts of Canada in areas where it does not currently operate.
As always, we will follow this story and keep our reader’s updated as new information comes out.