NEW YORK (The Deal) -- Talen Energy Corp. (TLN), now the third-largest independent power producer, inaugurated trading Tuesday, as its financial sponsor Riverstone Holding and publicly held power producer PPL Corp. (PPL) completed the asset merger announced a year ago.
Talen shares traded at about $18.50 a share in its first day of trading as a standalone company.
The transaction, announced June 9 last year, leaves PPL shareholders with 65% of the newly formed independent producer, while Riverstone holds 35% of the 83 million shares of Talen that were issued. PPL, formerly Pennsylvania Power & Light, which remains a regulated utility and had $11.5 billion in revenue last year, does not have a stake in Talen, which is based in Allentown, Pa. In the spinoff, PPL shareholders received 0.125 shares of Talen for each share of PPL.
Riverstone, with about $30 billion in committed capital, contributed about 5 gigawatts of operating capacity to the merger, which will have a combined operating capacity of just more than 15 million gigawatts. As part of the transaction, federal energy regulators required the combined company to sell off assets comprising about 1,300 gigiwatts of operating capacity. Riverstone contributed its RJS Power competitive power generation business to the merger, consisting of its Raven Power Holdings LLC, C/R Energy Jade LLC, and Sapphire Power Financial LLC.
The Raven Power operation, based in the Baltimore area, was formed with assets spun off by Exelon Corp. (EXC). That was required by regulatory agencies in order for the company to complete its 2012 $7.9 billion takeover of rival Constellation Energy Group. The Raven operation performed well enough last year to generate above-expectations cash flow that allowed the business to pay down debt and pay a dividend to Riverstone, credit agency reports at the time said.