DYN Dynegy Inc. (delisted)

Dynegy Inc. agreed to acquire Energy Capital Partners' interest in their joint venture formed in February to buy French power utility Engie's U.S. fossil portfolio.

Houston-based Dynegy said it would assume Energy Capital's 35% share of the upfront equity funding at closing, then pay a revised discounted floor price of $375 million post-closing. The company valued the transaction at $750 million.

In February, Dynegy said it would buy Engie's U.S. fossil portfolio for $3.3 billion through the joint venture, named Atlas Power, with the private-equity firm. Energy Partners also agreed to invest an additional $150 million in Dynegy, boosting its stake to 15%.

When forming the joint venture, Energy Partners gave Dynegy the ability to buy its interest for a minimum floor price of 2.25 times its net investment in the venture for an estimated minimum buyout price of $934 million. The companies reduced the upfront capital requirement and the minimum buyout multiple, cutting the cost of the buyout by $184 million and speeding up the integration of the Engie portfolio into Dynegy's existing business.

"As we indicated in February, Dynegy's intent has consistently been to fully own the Engie U.S. fossil portfolio," said Dynegy Chief Executive Robert Flexon. "The significant improvement in the financial markets since announcing the transaction in February provided an excellent opportunity for us to approach ECP about an earlier timetable."

It is the latest deal of many for Dynegy 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.

"This transaction accelerates our company's transformation, enabling us to increase our presence further in the most desirable markets with high quality assets," said Mr. Flexon.

The deal for Engie's fossil portfolio is on track to close during the fourth quarter.

Shares of Dynegy were inactive premarket.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

June 15, 2016 08:45 ET (12:45 GMT)

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