The Federal Trade Commission said last week that Tenaska Power Fund LP received antitrust approval to acquire six natural gas-fired power plants from Constellation Energy Group for $1.635 billion in cash.
First announced in early October (see NGI, Oct. 16), Baltimore-based Constellation Energy agreed to sell 3,145 MW of gas-fired generation assets to Tenaska Power Fund. The transaction is expected to yield net proceeds of approximately $1.5 billion, and Constellation anticipates a one-time, pre-tax gain of approximately $245 million.
Constellation said in June it would consider selling the assets. “Physical assets have been and will continue to be at the core of our overall business strategy,” said Constellation CEO Mayo A. Shattuck. “However, in the current market environment our gas-fired assets offer fewer synergies to our competitive supply portfolios than our baseload coal and nuclear assets.”
The transaction is expected to close late in 2006 or in early 2007 and is subject to regulatory approvals and other standard closing conditions. The plants to be sold are:
Tenaska Power Fund is a private equity limited partnership formed by its managing directors and the owners of Tenaska Energy, which is one of the largest independent power producers in the United States. Tenaska Energy affiliate Tenaska Capital Management LLC is the manager of the fund.
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