Constellation Energy has agreed to buy privately held natural gas and geothermal company Calpine Corp in a $16.4 billion deal, marking one of the largest acquisitions in U.S. power industry history.
The cash-and-stock transaction comes as electricity demand is rising due to increased use of AI data centers and electrification of buildings and transportation. The acquisition will make Constellation the largest U.S. independent power provider, expanding its natural gas-fired electricity generation.
Constellation CEO Joe Dominguez expects high demand for Calpine’s products, driven by the need to power the grid with low-carbon energy sources like natural gas and geothermal. He noted that Calpine’s low carbon-intensity gas fleet and advancements in carbon capture technology make it an attractive purchase.
The deal is expected to close this year and will add $2 billion to Constellation’s free cash flow annually. The combined company will have nearly 60 gigawatts of capacity from zero- and low-emission sources, including nuclear, natural gas, and geothermal.
Constellation’s employee base will grow by nearly 20% to 16,500, with the acquisition expected to increase its presence in key markets like Texas and California. The deal is seen as a strategic move to expand Constellation’s footprint and reduce exposure to PJM, while increasing its presence in California.
The transaction follows recent announcements from Constellation, including an unprecedented power purchase agreement with Microsoft for its Three Mile Island nuclear plant and record contracts with the U.S. government for nuclear power supply and energy-efficiency projects.
Source: https://finance.yahoo.com/news/constellation-energy-buy-calpine-26-120411891.html