) --


( MIR) and

RRI Energy


are merging in a stock-swap agreement valued at $1.61 billion.

The combination of the power companies will be known as GenOn Energy. It will have about 24,700 megawatts of electric generating capacity and a market capitalization of $3.1 billion.

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The merger has been approved by the boards of both companies. Mirant stockholders will receive a fixed ratio of 2.835 shares of RRI Energy common stock for each share of Mirant common stock they own. Based on Mirant's 143.9 million shares outstanding at March 8, the deal values Mirant at $1.61 billion.

On a per-share basis, Mirant is valued at $11.20 a share, a premium of 4% based on RRI's Friday closing price of $3.95.

Once the deal closes, expected before the end of 2010, Mirant stockholders will own about 54% of the GenOn and RRI Energy stockholders will own roughly 46%.

Edward Muller, chairman and CEO of Mirant, will be chairman and CEO of the combined company until 2013, when he plans to retire. Mark Jacobs, president and CEO of RRI Energy, will be president and chief operating officer of GenOn and will succeed Muller as CEO in 2013.

-- Reported by Joseph Woelfel in New York.

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