Power Company Acquired For $2.9 Billion

HOUSTON, TX — Reliant Resources, a unit of Reliant Energy headquartered here, has agreed to purchase Orion Power Holdings, Baltimore, MD, for $2.9 billion in cash. Orion is an electric power-generating company established in 1998 by former executives of Goldman Sachs, an investment banking and securities firm.

The acquisition will boost Reliant Resources’ power-generating capacity by 46%, adding 6,500 MW from Orion to its existing 14,100 MW. This is expected to provide an immediate increase in the company’s earnings per share.

Reliant is said to be paying a 40% premium over market value for Orion, and it will also assume $1.8 billion of debt.

Orion was created to acquire power plants in deregulated markets. Its plants are primarily in New York and the Midwest.