Dynegy Agrees To Be Bought By Vistra Energy In All-stock Deal - Quick Facts

(RTTNews) - Dynegy Inc. (DYN) announced Monday a definitive merger agreement, pursuant to which Dynegy will merge with and into Vistra Energy (VST), the parent company for TXU Energy and Luminant, in a tax-free, all-stock transaction.

The deal would create an integrated power company with combined market capitalization in excess of $10 billion and a combined enterprise value greater than $20 billion.

Under the terms of the agreement, Dynegy shareholders will receive 0.652 shares of Vistra Energy common stock for each share of Dynegy common stock they own. Based on Vistra Energy's closing share price of $20.30 on October 27, Dynegy shareholders would receive $13.24 per Dynegy share.

The companies anticipate closing the transaction in the second quarter of 2018. The transaction is subject to certain regulatory approvals.

Following the deal, Vistra Energy and Dynegy shareholders owning approximately 79 percent and 21 percent, respectively, of the combined company.

Through the all-stock transaction, both Vistra Energy and Dynegy shareholders are expected to benefit from an estimated $350 million in projected annual run-rate EBITDA value levers, additional annual free cash flow value levers of approximately $65 million, and approximately $500-600 million in projected net present value benefit from tax synergies.

With approximately $14 billion of adjusted EBITDA expected to be generated between 2018 and 2022, the combined company is projected to have approximately $5.5 billion in excess capital available for allocation toward balance sheet improvements, growth investments, and other value accretive opportunities.

Following the close of the transaction, the combined company will be led by Curt Morgan as President and Chief Executive Officer. Bill Holden will serve as the Chief Financial Officer with Jim Burke as the Chief Operating Officer.

The Board of Directors is expected to have a total of 11 directors consisting of the current eight members of the Vistra Energy Board and three members from Dynegy's Board.

The combined company's headquarters will be in Irving, Texas.

In pre-market activity, Dynegy shares were gaining around 3.7 percent to $11.64.