Dynegy Looks to Acquire Enron

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Dynegy Looks to Acquire Enron

11/09/2001
HOUSTON

Dynegy Inc. is in talks to buy troubled Enron Corp. in a deal that would involve a stock swap and a $1.5 billion capital infusion from San Francisco-based Chevron Texaco Corp., which has a big stake in Dynegy. A deal could be announced as early as today, according to multiple industry sources.

For Dynegy, the merger would catapult it to the top of the energy trading industry now dominated by Enron. Last year, the company had $29 billion in revenues, compared to $100 billion for Enron.

But Enron has not had a good year. The company's value has plummeted as a fast-moving financial crisis enveloped the company. The sale would cap an astonishingly rapid fall from grace for a company that not long ago was ballyhooed as one of the world's most innovative, not to mention profitable, according to Bloomberg News.

The form of ChevronTexaco's capital infusion was not yet clear, the report said. Chevron, which recently merged with Texaco, was one of Dynegy's founding investors and still owns 26.5 percent of the company.

In contrast to Dynegy, rival Houston-based El Paso Corp., which operates 300 Coastal Mart convenience stores, said it wanted no part of Enron, except perhaps for a few hard assets.