Aggressive era big Constellation has agreed to accumulate Calpine Corp. in a $16.4 billion deal that’s set to create the most important producer of fresh and dependable vitality within the U.S. with an asset portfolio of greater than 60 GW.
The definitive settlement, introduced on Jan. 10, features a money and inventory transaction valued at an fairness buy worth of roughly $16.4 billion. The deal consists of fifty million shares of Constellation inventory and $4.5 billion in money, plus the belief of $12.7 billion of Calpine’s web debt.“After accounting for money that’s anticipated to be generated by Calpine between signing and the anticipated deadline, in addition to the worth of tax attributes at Calpine, the web buy worth is $26.6 billion, reflecting a pretty acquisition a number of of seven.9x 2026 EV/EBITDA,” Constellation stated on Friday.
Calpine’s homeowners, led by Power Capital Companions (ECP), will maintain fairness within the mixed firm and have agreed to an 18-month lock-up interval. The deal is anticipated to shut inside 12 months, pending regulatory approvals. The acquisition would require regulatory clearance from the Federal Power Regulatory Fee, the Public Utility Fee of Texas, and different companies. Lazard and J.P. Morgan suggested Constellation, whereas Evercore and Morgan Stanley served as advisors to Calpine.
If finalized, the acquisition will mark a historic enterprise mixture—one of many largest for the U.S. era enterprise—merging the most important nuclear fleet within the nation with the most important pure fuel fleet. It’ll generate extra electrical energy than another firm within the U.S. “We’re going to have greater than 60 GW of capability from nuclear, pure fuel, geothermal, wind, and photo voltaic, an 80% enhance to Constellation’s capability, functionality,” stated Constellation President and CEO Joe Dominguez throughout an investor name on Friday. “These vegetation will produce an industry-leading 308 million MWh of electrical energy yearly.”
The transfer is daring for Constellation, which has established itself as a serious aggressive generator dedicated to decarbonization since its 2022 spinoff from dad or mum Exelon. The unbiased, publicly traded firm in the present day boasts the most important nuclear fleet within the nation, comprising 21 GW from 23 models, which offer baseload zero-emission energy. In November 2023, it accomplished an acquisition of NRG Power’s possession within the 2.6-GW South Texas Challenge Electrical Producing Station (STP), a nuclear energy plant positioned in Bay Metropolis, Texas. Constellation’s large 32.4-GW fleet additionally contains 12 GW of pure fuel, oil, hydroelectric, wind, and photo voltaic belongings, which offer baseload, intermediate, and peaking features.
Calpine Corp., based in 1984, has transitioned from a small geothermal operator into a serious vitality supplier with a 28-GW footprint in 22 states, Canada, and Mexico. After going through important monetary challenges, the corporate underwent a serious transformation in 2018 to turn into a privately held entity backed by a choose group of traders. At this time, Calpine has a various fleet of 78 operational energy vegetation, principally pure fuel–fired energy vegetation. Calpine, notably, additionally leads the nation’s era of geothermal energy, and it has a rising fleet of battery storage and carbon seize and sequestration tasks.
The mixed portfolio of nuclear and gas-generating belongings “is best-in-class” and well-suited to the mixed firm’s roughly 200 million MWh of retail electrical load to prospects throughout the nation, Dominguez famous on Friday. “Our buyer combine will stay 90% industrial and industrial prospects. That’s been a long-standing focus as a result of we predict these are the purchasers that we pair up finest within the composition of our belongings. The platform goes to have the ability to promote extra merchandise to all of those prospects, merchandise like our extremely profitable hourly [clean firm energy (CFE) product,” he added.
While Constellation has been a leader in the nuclear industry with excellent performance numbers, Dominguez said Calpine’s gas assets have also demonstrated high availability and capacity factors. “Like us, Calpine has been developing sustainability for products for their customers, lending natural gas power with renewable power to create a pathway for sustainability that has been a great product.”
Constellation is expected to unveil more details of its rationale for the acquisition in an investor call on Friday. Dominguez in a statement suggested the acquisition is set to better help the company serve its customers. “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,” he said.
Andrew Novotny, president and CEO of Calpine, also lauded the companies’ complementary attributes, including supercharging investment in emerging technologies, including carbon capture and new nuclear. “This is an incredible opportunity to bring together top-tier generation fleets, leading retail customer businesses, and the best people in our industry to help drive a stronger American economy for a cleaner, healthier, and more sustainable future,” he 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.”
—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).
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