Baltimore-based Constellation Energy announced Thursday (March 19) that it has agreed to sell some of its assets in the Northeastern PJM energy sector to LS Power for $5 billion.
The deal represents a large part of Constellation’s commitment to divest certain utility assets as part of a federal antitrust review connected with the company’s $26.6 billion acquisition of Calpine Corp. last year. That acquisition closed in January, making Constellation the largest private-sector power producer on the planet.
The deal includes five generating facilities representing a total 4.4-GW of gas-fired generating capacity in Delaware and Pennsylvania: Bethlehem, York1, York2, Hay Road and Edge Moor facilities.
New York-based LS Power is advised by White & Case and Willkie Farr & Gallagher. Kirkland & Ellis is outside legal counsel to Constellation.
On the financial side, Santander is advising LS Power; Barclays is M&A advisor to Constellation.
The deal leaves the Jack Fusco Energy Center, a 606-MW natural gas-fired facility outside Houston as the last remaining asset to be divested under the agreement with FERC. A minority investment in the 385-MW Gregory Power Plant near Corpus Christi was divested earlier this year.
“PJM is at the epicenter of the surge in electricity demand, and these are exactly the kind of assets the grid needs – efficient, dispatchable gas generation that can deliver reliable power around the clock,” said Paul Segal, CEO of LS Power.
The Kirkland team advising Constellation was led from New York and Austin by David Feirstein (New York) and Kim Hicks (Austin). The team also included Mike Bassi (Houston), Claire Wolf (Austin) and Olga Cosme Toledo (Houston); debt finance lawyers Rachael Lichman (Houston), Charlie Martin (Houston) and Will Zakhary (Houston); tax lawyers Mark Dundon (Houston) and Rachel Malhiet (Austin); antitrust & competition lawyers Ian John (New York) and Todd Garcia (New York); and energy regulatory lawyers Brooksany Barrowes (Washington, D.C.), Andrew DeVore (Washington, D.C.) and Cassidy Hall (Washington, D.C.).
The White & Case team advising LS Power was led from Houston by M&A partner Josh Teahen along with New York partners Jane Kim on M&A and Andrew Weisberg on capital markets. The team also included Monica Hwang (Houston), Samer Mahjoub (Houston), Luke Allen (Houston), Chad McCormick (Houston), Neil Clausen (Houston), Kealan Hannes (Houston) and Jason McCoy (Houston).