New York, January 15, 2026, 17:08 EST — After-hours
- Talen Energy is acquiring 2.6 GW of gas-fired power capacity from Energy Capital Partners in a $3.45 billion deal
- After-hours trading saw shares rise roughly 12%
- Investors are zeroing in on financing details, regulatory approvals, and Talen’s upcoming data-center deal
Talen Energy shares jumped 11.8% to $419.07 in after-hours trading Thursday, following its deal to acquire 2.6 gigawatts of natural gas-fired generating capacity from Energy Capital Partners for $3.45 billion. Evercore ISI analyst Nicholas Amicucci called the transaction a sign of “tremendous value” in existing PJM assets. (Reuters)
The timing couldn’t be clearer. U.S. power demand is set to hit record levels in 2026, driven by data centers linked to AI and cryptocurrency ramping up usage, alongside rising consumption from homes and businesses. (Reuters)
Talen is doubling down on the squeeze with steel-in-the-ground capacity ready to fire up when called on. The company expects the purchase to boost adjusted free cash flow per share by over 15% annually through 2030. (GlobeNewswire)
The agreement includes the Waterford Energy Center and Darby Generating Station in Ohio, plus the Lawrenceburg Power Plant in Indiana. The total price is around $2.55 billion in cash, along with about $900 million in Talen stock. To cover the cash part, the company plans to take on new debt.
Talen said the deal would nearly double its projected annual generation within two years and grow its presence in PJM, the regional grid operator covering the U.S. Mid-Atlantic and Midwest. A gigawatt measures peak generating capacity.
“AI and data center capital budgets … continue to expand, not contract,” Chief Executive Mac McFarland said during a conference call. He highlighted “significant data center tailwinds” in western PJM in the company’s announcement. Meanwhile, Energy Capital Partners partner Andrew Gilbert called the Ohio story “PJM’s most exciting narrative.”
Two of the plants are modern combined-cycle units, which recycle exhaust heat to squeeze extra power from the same fuel. Darby, on the other hand, serves as a peaking plant, kicking in during demand spikes. Talen noted these assets benefit from cheap gas supplies sourced from the Marcellus and Utica shale regions.
The press release valued the deal at roughly 6.6 times the expected adjusted EBITDA for 2027, a standard measure of operating profit. It also noted that Energy Capital Partners will emerge as a major shareholder once the deal closes. Talen outlined a goal to reduce net leverage to 3.5 times or less by the close of 2026.
But the numbers rely on flawless execution. The cash piece needs fresh borrowing, while the timeline to close rests on U.S. antitrust approval and green lights from power-market regulators; if funding gets pricier or approvals drag, the expected per-share boost might shrink.
Basic market risk remains: power prices fluctuate, gas prices move unpredictably, and the speed of data-center expansions is still uncertain. If load growth slows or PJM pricing becomes less attractive, the cash-flow argument weakens.
Talen has been expanding its PJM fleet, sealing a $3.5 billion agreement last year for two additional combined-cycle gas plants in Pennsylvania and Ohio. The company refers to this move as part of its “flywheel” strategy. (Reuters)
Investors are set to focus on Talen’s upcoming debt issuance and the kickoff of regulatory filings, which include scrutiny from the Federal Energy Regulatory Commission and Indiana authorities. The company has also teased a new data-center deal, expected to be unveiled once finalized, with the acquisition scheduled to close early in the second half of 2026.
