NRG Energy ( NRG) announced Sunday that it plans to buy privately held Texas Genco in a deal valued at $8.3 billion.

The agreement calls for NRG to pay $4 billion in cash and $1.8 billion in stock, plus assume about $2.5 billion in debt.

NRG, which is based in Princeton, N.J., expects the transaction to close in the first quarter of 2006, and to be "immediately and significantly accretive" to earnings and cash flow, the company said in a press release.

The merger would be the first major consolidation move in the merchant power generation industry.

Houston-based Texas Genco is the second-largest generator in its region, which encompasses most of Texas. It has 11 power plants, with more than 11,000 megawatts of generating capacity that would increase NRG's capacity to almost 24,000 megawatts.

The deal must be approved by the Federal Energy Regulatory Commission and perhaps the Public Utilities Commission of Texas.

Shares of NRG closed at $42.60 Friday.

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