NRG Energy Enters into Agreement to Acquire Edison Mission Energy

NRG Energy, Inc. has entered into a plan sponsor agreement with Edison Mission Energy (EME), certain of EME's subsidiaries, the unsecured creditors committee, certain of EME's unsecured noteholders, and other parties to acquire substantially all of the assets of EME, including its equity interests in certain of its subsidiaries, for an aggregate purchase price of $2.635 billion, or $1.572 billion net of $1.063 billion retained cash within EME.

EME and NRG have entered into an asset purchase agreement, dated October 18, 2013. The acquisition and transactions contemplated in the purchase agreement will be consummated as part of an EME Chapter 11 plan of reorganization to be sponsored by NRG. Each of EME's major stakeholders has agreed to support and pursue a Chapter 11 plan sponsored by NRG.

The assets to be acquired include:

• EME's generation portfolio, which consists of nearly 8,000 net MW of generation capacity located throughout the US, including 1,700 MW of wind capacity, 1,600 MW of gas-fired capacity, 4,300 MW of coal-fired capacity, and 400 MW of oil and waste coal-fired capacity

• Edison Mission Marketing and Trading, a proprietary trading and asset management platform

NRG said that the transaction significantly expands pipeline of assets available to drive growth at NRG Yield through future drop-downs with 1,600 MW of long-term, fully-contracted wind and natural gas assets.

The aggregate purchase price, which is subject to certain post-closing adjustments, will consist of approximately 12.7 million shares of NRG common stock (valued at $350 million based upon the volume-weighted average trading price of the 20 trading days prior to October 18, 2013) with the balance to be paid in cash on hand. In connection with the transaction, NRG will also assume non-recourse debt of approximately $1.545 billion, of which $273 million is associated with assets designated as Non-Core Assets pursuant to the asset purchase agreement.

NRG expects to close the transaction in the first quarter of 2014. In addition to the approval of the Bankruptcy Court, the transaction is subject to customary closing conditions, and receipt of regulatory approval by the Federal Energy Regulatory Commission (FERC), the U.S. Department of Justice and the Federal Trade Commission under the Hart-Scott-Rodino Act and the Public Utility Commission of Texas.

EME may continue to solicit alternative transaction proposals from third parties through December 6, 2013. If EME's board of directors determines, consistent with its fiduciary duties, that another proposal or proposals is better for EME and its stakeholders than the terms of this transaction, NRG will have advance notice of EME's intention to terminate the purchase agreement. Under specified circumstances, including if EME enters into or seeks approval of certain alternative transactions, and following approval from the Bankruptcy Court, NRG will be entitled to receive a cash fee of $65 million and expense reimbursement to the extent the plan sponsor agreement and asset purchase agreement are terminated.