PSEG Said to be in Merger Talks with Cinergy

NEWARK-Neither side will comment on the record, but according to a published report, Public Service Enterprise Group, which owns PSE&G, the Garden State’s largest utility company, is in talks to acquire Cincinnati, OH-based Cinergy Corp. The price tag being floated is $5.6 billion, with PSEG apparently willing to take over Cinergy’s $2.9 billion in long-term debt.

A lot of that debt load traces back seven years to the merger of Cincinnati Gas & Electric with Public Service of Indiana. While the resulting Cinergy turned into a major power player, it has struggled to find its niche in the increasingly turbulent, deregulated energy business.

Indeed, Cinergy CEO James Rogers is known to be actively seeking a merger. Over the last few years Cinergy is known to have had conversations with 10 or so potential partners, but nothing came of them. The two most active suitors, until now, have been based in the UK–PowerGen Plc and Scottish Power Plc. Both are said to have grown skittish because of Cinergy’s debt load and the uncertainties of the US deregulation scene.