Talen Energy Corporation announced it has signed definitive agreements to add approximately 2.6 GW of natural gas generation capacity to Talen’s portfolio through the acquisition of the Waterford Energy Center and Darby Generating Station in Ohio, and the Lawrenceburg Power Plant in Indiana from Energy Capital Partners (ECP).

Talen said the acquisition will “substantially expand” its presence in the western PJM market and add additional efficient baseload generation assets to its fleet.

The acquisition price is $3.45 billion and consists of approximately $2.55 billion in cash and approximately $900 million in Talen stock. The transaction is expected to provide immediate and significant adjusted free cash flow per share accretion in excess of 15% annually through 2030E. Additionally, these assets are expected to achieve an approximately 85% unlevered free cash flow conversion rate before recognition of any tax benefits.

“When this transaction is complete, Talen will have approximately doubled its expected annual generation output inside of two years, meaningfully diversified our fleet, and materially increased our free cash flow per share,” said Terry Nutt, Talen President. “We are also excited to welcome ECP as a significant Talen shareholder.”

The 1,218-MW Lawrenceburg and 869-MW Waterford facilities have an average heat rate of approximately 7,000 Btu/kWh and capacity factors greater than 80%. The 480-megawatt Darby facility also operates as a peaking unit. Talen argues that the addition of the facilities to its portfolio enhances the company’s ability to offer low-carbon capacity to hyperscale data centers and large commercial off-takers.

Talen expects to issue new debt to fund the cash portion of the purchase price.

The transaction is expected to close early in the second half of 2026 and is subject to customary closing conditions and regulatory approvals from the Federal Energy Regulatory Commission, Indiana Utility Regulatory Commission and other regulatory agencies.