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GPU sells plants for $1.72B
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November 9, 1998: 7:53 a.m. ET
GPU exits from generation, Sithe becomes biggest U.S. power producer
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NEW YORK (CNNfn) - Diversified power company GPU Inc. said Monday that will sell the remainder of its generator business in two deals worth a total of $1.72 billion.
Privately-held Sithe Energies will pay $1.68 billion for GPU's 23 non-nuclear power plants in New Jersey, Pennsylvania and Maryland, along with all associated service facilities and office properties.
The purchase makes Sithe - a joint venture between French utility Vivendi and Japanese conglomerate Marubeni Corp. - the largest independent power producer in the United States with more than 20,000 megawatt production capacity.
"This is a defining transaction for Sithe," said Sithe CEO and Chairman William Kriegel. "It more than doubles our North American generating capacity . . . We are excited to be a leading power producer in this region where electric restructuring is already well advanced and where the demand for electric power is among the highest in the nation."
As part of the agreement, GPU consumer subsidiary GPU Energy receives an option to buy power from Sithe at fixed prices through mid-2002.
GPU's sole remaining generation asset - a 20-percent stake in the Seneca hydroelectric plant - will go to FirstEnergy Corp. for $43 million, freeing Morristown, N.J.-based GPU to concentrate on energy distribution and other infrastructure services.
"With agreements to sell the Homer City generating station (August 3), the Three Mile Island Unit 1 nuclear facility (October 15) and now these transactions, GPU has taken the definitive step in our strategy to exit the generation business," said Fred D. Hafer, GPU chairman, president and CEO.
FirstEnergy, based in Akron, Ohio, already owns the other 80 percent of the Seneca facility.
Pending regulatory approval, the transactions should close by mid-1999, GPU said.
GPU stock (GPU) shed 1/8 to close at 44-3/4 on Friday, while FirstEnergy (FE) lost 3/16 to 30-5/8. 
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