Dynegy to Buy Assets From French Utility Engie

Dynegy Inc. said Thursday it would buy Engie's U.S. fossil portfolio for $3.3 billion, snapping up assets from the beleaguered French power utility in its latest move to bulk up.

Houston-based Dynegy said it would make the purchase through a newly formed joint venture, named Atlas Power, with Energy Capital Partners. The private-equity firm is investing an additional $150 million in Dynegy, boosting its stake to 15%. As part of the agreement, Energy Capital will control one seat on the company's board for as long as its stake tops 10% and will own 35% of the joint venture.

Dynegy Chief Executive Officer Robert Flexon called the deal "a compelling value" as it is "the right assets, in the right markets, at the right price."

On Thursday, Engie, formerly known as GDF Suez, reported that it had tumbled to an unexpected net loss in 2015 after writing down €8.7 billion ($9.58 billion) worth of assets because of current market conditions, mainly in the oil and gas-extraction industry and on power generation assets supplying spot markets. Engie said it would shed some €15 billion ($16.54 billion) in assets.

For Dynegy the deal is the latest in a series since it emerged from bankruptcy protection in late 2012. In August 2014, the company nearly doubled its power-generating capacity when it bought 21 plants for $6.25 billion from Duke Energy Corp. and Energy Capital Partners.

Dynegy and Energy Capital said Thursday that they expect to see $90 million in annual cost savings through the acquisition.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

February 25, 2016 07:15 ET (12:15 GMT)

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