Constellation acquires Calpine for $26 billion
Constellation and Calpine unite to lead U.S. energy market
Constellation Energy Corp. has announced plans to acquire Calpine, a major provider of natural gas and geothermal power, in a $16.4 billion deal that will combine two of the largest power companies in the United States.
The transaction, unveiled Friday, involves 50 million shares of Constellation stock, $4.5 billion in cash, and the assumption of $12.7 billion in Calpine debt. Factoring in anticipated cash generated by Calpine before the deal's completion and tax attributes for the company, the purchase price is estimated at $26.6 billion, reports The Associated Press.
A zero- and low-emission energy leader
The merger will create a combined company with nearly 60 gigawatts of capacity from diverse energy sources, including nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration, and battery storage. It will also establish the nation's largest retail electric supplier, serving 2.5 million customers.
“By combining Constellation’s unmatched expertise in zero-emission nuclear energy with Calpine’s best-in-class, low-carbon natural gas and geothermal generation fleets, we will offer the broadest array of energy products and services in the industry,” said Constellation CEO Joe Dominguez in a statement.
The combined business is expected to generate over $2 billion in free cash flow annually, enabling significant reinvestment into operations and further expansion of clean energy capabilities.
Regulatory approvals and timeline
The transaction, anticipated to close within a year, will require regulatory approvals from multiple agencies, including the Federal Energy Regulatory Commission, the Canadian Competition Bureau, and public utility commissions in New York and Texas.
Privately held Calpine, based in Houston, has a strong presence in low-carbon energy generation, while Baltimore-based Constellation is a leader in nuclear energy. Shares of Constellation surged over 13% in premarket trading following the announcement, reflecting investor optimism about the merger’s potential.
The deal positions Constellation and Calpine as a dominant force in the transition to cleaner energy, combining zero- and low-emission technologies to meet growing demand for sustainable power solutions. Industry stakeholders will be closely watching the regulatory process and the companies' plans for further investment in green energy.
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