March 14 (Reuters) - Utility company Ameren Corp said it will sell its merchant generation business, Ameren Energy Resources Co, to Dynegy Inc, and will focus on its rate-regulated electric, natural gas and transmission operations.
Benefits from the divestiture are estimated to be about $900 million for Ameren, the company said in a statement.
The sale removes $825 million in debt from Ameren’s balance sheet and will create an estimated $180 million in tax benefits.
“We expect that this transaction will reduce business risk and improve the predictability of our future earnings and cash flows, which is expected to strengthen Ameren’s credit profile and support Ameren’s dividend,” said Ameren CEO Thomas Voss.
Ameren shares were up nearly 5 percent before the bell. They closed at $34 on the New York Stock Exchange on Wednesday.