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Constellation Energy Acquires Calpine for $26.6 Billion, Aiming to Serve 2.5 Million Customers Amid AI Demand in Texas

Jan 10, 2025, 01:33 PM

Constellation Energy Corp. has agreed to acquire Calpine Corp. for $16.4 billion in a deal that will create the largest clean energy provider in the United States. The transaction includes $4.5 billion in cash, 50 million shares of Constellation stock, and the assumption of approximately $12.7 billion of Calpine's debt, valuing the deal at $26.6 billion when accounting for expected cash generation and tax attributes. The merger combines Constellation's nuclear power expertise with Calpine's natural gas and geothermal generation capabilities, resulting in a combined capacity of nearly 60 gigawatts from zero- and low-emission sources. The acquisition is expected to close within a year, pending regulatory approvals from various agencies including the Federal Energy Regulatory Commission and the Public Utility Commission of Texas. The deal is anticipated to add more than $2 billion of free cash flow annually, enabling reinvestment into the business. Constellation's shares surged more than 13% before the market opened following the announcement. The combined entity will serve 2.5 million customers and aims to capitalize on the growing demand for electricity, particularly from AI data centers, with a significant presence in the Texas market. Constellation's stock rose 23% on the day of the announcement, reaching an all-time high.