The AES Corp. has executed a definitive agreement under which AES has agreed to acquire DPL Inc. in a transaction valued at US$4.7 billion on an enterprise value basis. Upon closing of the transaction, DPL will become a wholly owned subsidiary of AES. DPL is the parent company of the Dayton Power & Light Co. (Dayton, Ohio, U.S.).

Under the terms of the agreement, AES has agreed to pay $30 per share in cash to DPL shareholders. AES will pay a total of $3.5 billion in cash for the equity and assume $1.2 billion in net debt for a total transaction value of $4.7 billion. AES has committed bridge financing in place from Bank of America Merrill Lynch. Permanent financing will include a combination of non-recourse debt, the re-issuance of corporate debt at AES that was temporarily paid down in 2010 and cash on hand.

DPL serves over 500,000 customers in West Central Ohio through its subsidiaries, DP&L and DPL Energy Resources. DPL operates over 3,800 MW of power generation facilities and provides competitive retail energy services to industrial and commercial customers.

DPL will remain a standalone business, with local management and corporate functions, but will be able to leverage the best practices and resources of AES' global portfolio. DPL headquarters will remain in Dayton, customers will continue to be served by DP&L and the company will continue to use the DP&L name.

AES has a history in the U.S. utility sector with its investment in Indianapolis Power & Light Co. After AES acquired IPL, it invested more than $500 million in environmental controls, while maintaining rates that are among the lowest in Indiana and earning attractive after-tax returns for AES.

The consummation of the transaction is subject to approval of DPL shareholders, the Public Utilities Commission of Ohio, the Federal Energy Regulatory Commission and the antitrust review under the Hart-Scott-Rodino Act. Approvals are expected to be completed within six to nine months.

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