Constellation is set to acquire Calpine, a prominent provider of natural gas and geothermal energy, in a groundbreaking deal valued at $16.4 billion. This merger will unite two of the major power companies in the United States.
According to the companies’ announcement on Friday, this acquisition will establish the largest retail electric supplier in the U.S., benefiting around 2.5 million customers. The new entity will have a presence that spans the continental United States, significantly enhancing its operations in Texas—identified as the fastest-growing power market—as well as in other strategically important states such as California, Delaware, New York, Pennsylvania, and Virginia. The total financial undertaking is approximately $26.6 billion, taking into account the acquisition of $12.7 billion in Calpine’s debt.
Constellation’s purchase will consist of 50 million shares along with $4.5 billion in cash. The newly merged company will boast nearly 60 gigawatts of power capacity derived from various zero- and low-emission sources including nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration, and battery storage.
Joe Dominguez, CEO of Constellation, expressed that combining the company’s robust expertise in zero-emission nuclear energy with Calpine’s top-tier low-carbon natural gas and geothermal generation capabilities will allow for a wider selection of energy products and services in the industry. He made this statement during the announcement on Friday.
The acquisition is forecasted to generate an additional $2 billion in annual free cash flow, which the two companies say will help create strategic capital and the scale necessary to reinvest in their operations effectively.
Calpine’s CEO Andrew Novotny noted that the partnership will better position the companies to accelerate investments across various sectors, from zero-emission nuclear energy to battery storage solutions that aim to empower the economy while prioritizing people and the environment.
The deal is projected to finalize within a year from the signing date and will require regulatory approvals from multiple federal and state agencies, including the Federal Energy Regulatory Commission, the Canadian Competition Bureau, the New York Public Service Commission, and the Public Utility Commission of Texas.
Calpine operates as a privately held entity out of Houston, while shares of Constellation Energy Corp., headquartered in Baltimore, saw an increase of over 25% on Friday after the announcement.
