(Reuters) - U.S. power company Talen Energy Corp TLN.N said on Monday it would acquire private power producer Mach Gen LLC for $1.18 billion to expand in the wholesale power markets.
New York-based Mach Gen runs three gas-fueled power plants in New York, New England and Arizona.
Talen was formed in late 2014 when PPL Corp (PPL.N) spun off its generation assets that sell power to wholesale markets, where prices are not regulated by the government.
Many utilities are increasing their reliance on the rate-regulated portions of their businesses as wholesale markets tend to be more volatile.
The deal will raise Talen Energy’s total generating capacity to 17,600 megawatts (MW) from about 15,000 MW.
Citi was financial adviser to Talen, while Bracewell & Giuliani LLP was transaction counsel for Talen. Simpson Thacher & Bartlett LLP was finance counsel.
Reporting by Shubhankar Chakravorty in Bengaluru; Editing by Saumyadeb Chakrabarty