GenOn Energy generation mix and geographic diversity. Click to enlarge.

Under the terms of the merger agreement, which has been approved unanimously by the Boards of Directors 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. The ratio reflects an at-market transaction based on the volume-weighted average price for the preceding 10 trading days. Upon closing, which is expected before the end of 2010, Mirant stockholders will own approximately 54% of the equity of the combined company and RRI Energy stockholders will own approximately 46%.

The merger brings together two organizations with complementary electric generating assets, enabling GenOn to derive substantial near- and long-term benefits from significant cost savings, greater scale, geographic diversity, and increased financial strength and flexibility. GenOn will have a strategically balanced presence across key regions, including the Mid-Atlantic, California, the Northeast, the Southeast and the Midwest.

The combined fleets are largely complementary, with limited overlap in their respective operating regions. The transaction is subject to customary closing conditions, including approval by the stockholders of RRI Energy and Mirant, US antitrust approval and approval by the Federal Energy Regulatory Commission (FERC). The closing is also subject to the refinancing of a portion of each company’s existing debt.

Mirant owns or leases more than 10,000 megawatts of electric generating capacity; the fleet uses coal, natural gas and oil. The company operates an asset management and energy marketing organization from its headquarters in Atlanta. RRI Energy, Inc., based in Houston, provides electricity to wholesale customers in the United States. The company is one of the largest independent power producers in the nation with more than 14,000 megawatts of power generation capacity across the United States. These generating assets use natural gas, oil and coal.