Vistra Energy, a Dallas power generator and retail electricity company, is considering a bid to takeover the Houston merchant power company Dynegy, according to news reports.
The Wall Street Journal, citing unnamed sources, reported that Vistra has approached Dynegy about a takeover that could create the nation’s largest independent power producer. The companies are in preliminary talks, the Journal said, citing some people familiar with the matter.
Vistra declined to comment. Dynegy officials could not be immediately reached for comment.
Dynegy has expanded in recent years and taken on significant debt. In 2014, Dynegy made two deals totaling $6.25 billion to buy 19 power plants in the Midwest and Northeast from Duke Energy of North Carolina and Energy Capital Partners of New Jersey.
Earlier this year, Dynegy closed on a $3.3 billion deal with the French energy company Engie to acquire 17 power plants around the country, including six plants in Texas. Most are natural gas-fired.
For the first quarter of this year, Dynegy recently reported that its revenues rose modestly during the first quarter to $1.2 billion from $1.1 billion, and profits were $597 million as compared to a loss of $10 million during the first quarter last year.
The company’s performance was aided by a resolved bankruptcy and hefty tax benefit, Dynegy reported. Itssubsidiary, Genco, filed for bankruptcy last year and through restructuring was relieved of $483 million in debt, Dynegy said. Dynegy’s acquisiton of Engie’s plants also provided Dynegy a $313 million tax benefit.