U.S.-based global power provider AES Corp is to buy rival DPL Inc for $3.5 billion as it braces for huge environmental and plant upgrade costs and looks to secure steady returns from regulated electricity businesses. Deal activity in the power sector has jumped as companies, stung by falling electricity prices, face a double whammy of regulations requiring power grid upgrades and new environmental controls as well as new-generation power plants. PPL Corp last month snapped up German utility E.ON AG's (EONGn.DE) UK power networks for 3.5 billion pounds ($5.71 billion), while Duke Energy is to buy Progress Energy for $13.7 billion. Southern and DTE Energy are among those who have said the U.S. Environmental Protection Agency is being too aggressive in calling for power plants to meet new rules within three years, and could put the reliability of the electric grid at risk.
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