M&A

Merger Monday on Both Sides of Atlantic

NRG Energy and Texas Genco; R.H. Donnelley Corp. and Dex Media; Alliance UniChem and Boots Group; NTL and Telewest Communications; Telefonica and R...
Stephen TaubOctober 3, 2005

NRG Energy has agreed to buy Texas Genco LLC for about $5.8 billion in a further consolidation of the U.S. wholesale power generation industry. NRG will plunk down roughly $4 billion in cash and $1.8 billion in common and preferred stock. In addition, the company will assume approximately $2.5 billion of Texas Genco debt.

“Texas Genco is an ideal strategic fit with NRG,” said David Crane, NRG’s president and chief executive officer, in a statement. “The strengths of its people and its assets align closely with our own, bolstering NRG’s platform for growth and our ability to drive value for our shareholders.”

Just four months ago, Duke Energy Corp. agreed to buy Cinergy Corp. for nearly $9 billion in stock.

In a merger of yellow-pages publishers, R.H. Donnelley Corp. announced that it will buy Dex Media Inc. for about $4.2 billion, creating the third-largest print and Internet directory publisher in the United States. Each Dex share will be exchanged for $12.30 in cash and 0.24154 Donnelley shares.

“This combination will create a company with the scale, innovative products and services, and proven business processes to lead our industry into the era of integrated local commercial search, encompassing both print and digital platforms,” said David C. Swanson, R.H. Donnelley’s chairman and chief executive officer, in a statement. “Dex brings a proven marketing capability, a leading online operation, and a track record for innovation that will allow us to accelerate our growth.”

In a blockbuster deal in Europe, drug distributor Alliance UniChem PLC agreed to merge with Boots Group PLC, the U.K.’s largest drugstore chain, in a deal valued as high as $5.6 billion, according to Bloomberg. The new company, to be called Alliance Boots, will become Europe’s second-largest drug distributor with nearly $23 billion in annual sales, according to several reports.

In another sizable deal, British-based cable operator NTL Inc. is buying British cable-TV provider Telewest Communications for $6 billion, creating Britain’s second-largest communications company, according to the Associated Press. Telewest shareholders will reportedly receive $16.25 per share in cash and 0.115 NTL shares for each Telewest share, and NTL will assume $3 billion of debt.

Meanwhile, a number of published reports suggested that Spanish telecom Telefonica SA would soon announce that it will pay $24.1 billion to acquire Dutch telecom Royal KPN NV. According to The Wall Street Journal, Telefonica spokespeople denied the report, while KPN declined comment.

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