Constellation Energy has signed a definitive agreement to acquire Calpine, an operator of natural gas and geothermal plants in the US, in a cash-and-stock transaction valued at approximately $16.4bn.
The deal includes 50 million shares of Constellation stock, $4.5bn in cash, and the assumption of $12.7bn in Calpine’s net debt.
After factoring in Calpine’s cash flow until closing and tax attributes, the transaction values the company at $26.6bn.
Through the merger, Constellation aims to establish the largest clean energy provider in the US.
The deal will combine Constellation’s emissions-free nuclear generation with Calpine’s low-emission natural gas plants and renewable energy assets.
Established in 1984, Calpine operates a fleet of 79 energy facilities with a combined generation capacity exceeding 27GW.
Through its wholesale power operations and retail businesses, the company serves customers across 22 US states and Canada.
Calpine president and CEO Andrew Novotny said: “Together, we will be better positioned to bring accelerated investment in everything from zero-emission nuclear to battery storage that will power our economy in a way that puts people and our environment first.
“It’s a win for every American family and business in our newly combined footprint that wants clean and reliable energy. ECP’s commitment to these goals over the last seven years was critical to the progress we have made as a company and to laying a foundation for future growth.”
Together, the companies will boast nearly 60GW of generation capacity spanning nuclear, natural gas, geothermal, wind, hydro, cogeneration, battery storage, and solar.
Additionally, the acquisition will expand Constellation’s footprint nationwide, with presence in Texas, and other key states including California, New York, and Pennsylvania.
The combined entity is also anticipated to address surging electricity demands with a diverse portfolio of energy solutions, offering expanded capabilities for retail and commercial customers.
Constellation will expand its customer base to 2.5 million households and businesses, providing tailored energy solutions, including new products integrating nuclear, renewable, and natural gas technologies.
Calpine’s natural gas plants are expected to support grid reliability during the transition to cleaner energy sources.
Both companies are investing in carbon capture technologies, aligning with broader efforts to reduce emissions.
Constellation also plans to increase zero-emission energy production by expanding its renewable portfolio and advancing nuclear and other clean energy projects.
Constellation president and CEO Joe Dominguez said: “By combining Constellation’s unmatched expertise in zero-emission nuclear energy with Calpine’s industry-leading, best-in-class, low-carbon natural gas and geothermal generation fleets, we will be able to offer the broadest array of energy products and services available in the industry.
“Both companies have been at the forefront of America’s transition to cleaner, more reliable and secure energy, and those shared values will guide us as we pursue investments in new and existing clean technologies to meet rising demand.”
In addition, the acquisition is projected to deliver immediate financial benefits, with Constellation expecting adjusted operating earnings per share (EPS) growth exceeding 20% in 2026.
The deal will also contribute annual free cash flow additions of more than $2bn.
Calpine’s major shareholders, including Energy Capital Partners (ECP), Canada Pension Plan Investments (CPP Investments), and Access Industries, have agreed to an 18-month lock-up period for their equity ownership in Constellation common stock.
Subject to regulatory approvals, including the US Federal Energy Regulatory Commission (FERC), the Canadian Competition Bureau, and state-level authorities, the transaction is anticipated to be completed within 12 months.
