Constellation and Calpine announced they have entered into a definitive agreement under which Constellation will acquire Calpine in a cash and stock transaction valued at an equity purchase price of approximately $16.4 billion, which is composed of 50 million shares of Constellation stock and $4.5 billion in cash plus the assumption of roughly $12.7 billion of Calpine net debt. And after accounting for money that is expected to be generated by Calpine between signing and the scheduled closing date, as well as the value of tax attributes at Calpine, the net purchase price is $26.6 billion, reflecting an attractive acquisition multiple of 7.9 times 2026 EV/EBITDA.
This deal creates the nation’s largest clean energy provider, opening opportunities for serving more customers coast-to-coast with a broader array of energy and sustainability products. Already the nation’s largest producer of 24/7 emissions-free electricity, Constellation will add Calpine (the largest U.S. producer of energy from low-emission natural gas generation and an expanded renewable energy portfolio, including the largest geothermal generation operation in the US).
This combination also forms the nation’s leading competitive retail electric supplier, providing 2.5 million customers with a broader array of customized energy and sustainability solutions and new product offerings to help them manage energy costs and achieve their sustainability goals.
Calpine’s low-emission natural gas plants will significantly maintain grid reliability for decades as customers transition to cleaner energy sources. And the companies have been early investors in carbon sequestration technology to help ensure America’s abundant natural gas can continue to reliably power customers. Constellation will also invest in adding more zero-emission energy to the grid by extending the life of existing clean energy sources, exploring new advanced nuclear projects, investing in renewables, increasing the output of existing nuclear plants, and restarting the Crane Clean Energy Center in Pennsylvania.
This deal will create the cleanest and most reliable generation portfolio in the U.S., with a diverse, coast-to-coast portfolio of zero- and low-emission generation assets, and expand Constellation’s footprint in the fastest-growing area of power demand. Constellation and Calpine will have nearly 60 gigawatts of capacity from zero- and low-emission sources, including nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration, and battery storage. The combined company’s footprint will span the continental U.S. and include a significantly expanded presence in Texas, the fastest-growing power demand market, and other key strategic states, including California, Delaware, New York, Pennsylvania, and Virginia.
The deal will expand Constellation’s industry-leading customer solutions business to position the combined company as the leading U.S. retail electricity supplier, helping 2.5 million homes and businesses nationwide achieve their energy and sustainability needs. The combined company will offer customers a broader array of reliable energy solutions, including new product offerings that can integrate nuclear, renewable, and natural gas technologies tailored to customers’ unique needs. Customers will also have more predictability and competitive prices due to the two companies’ complementary generation assets, load, fuel diversity, geographies, and product offerings.
Constellation is already the top clean energy producer in the U.S., providing 10% of the nation’s emissions-free energy and joining Calpine with Constellation broadens this position by increasing Constellation’s renewable portfolio, including the Geysers facility in Northern California, the largest geothermal generator in the U.S. The combined company will grow further, enhanced by its increased scale and cash flow.
Constellation and Calpine’s people share a passion for powering America’s families and businesses with energy that is reliable, clean, and available whenever needed. And both companies are innovators recognized across the industry for operating at the highest levels of safety, efficiency, and reliability and for offering competitive products that allow customers to meet their energy needs cost-effectively. After the closing of the deal, Calpine CEO Andrew Novotny will bring his decades of energy expertise and leadership to Constellation and continue to lead the Calpine business.
The combined company will increase its positive impact, serving as an economic engine for local communities through jobs, tax payments, and other economic activity. And the combined company will continue its commitment to communities through more than $21.1 million in combined annual Foundation, corporate and employee philanthropy, and thousands of employee volunteer hours, focusing on economically disadvantaged communities.
The deal is expected to close within 12 months of signing, subject to the satisfaction of customary closing conditions. And following the close of the transaction, Constellation will continue to be headquartered in Baltimore and maintain a significant presence in Houston, where Calpine is currently headquartered.
Lazard is serving as a financial advisor to Constellation. And J.P. Morgan Securities is also serving as financial advisor to Constellation, and Kirkland & Ellis serves as legal counsel.
Evercore served as lead financial advisor to Calpine. And Morgan Stanley, Goldman Sachs, and Barclays US are serving as additional financial advisors to Calpine and ECP, and Latham & Watkins and White & Case serve as legal counsel.
KEY QUOTES:
“This acquisition will help us better serve our customers across America, from families to businesses and utilities. 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. What makes this combination even more special is it brings together two world-class teams, with the most talented women and men in the industry, who share a noble passion for safety, sustainability, operational excellence and helping America’s families, businesses and communities thrive and grow. We look forward to welcoming the Calpine team upon closing of this transaction.”
– Joe Dominguez, president and CEO, Constellation
“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. 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.”
– Andrew Novotny, president and CEO of Calpine
“Since acquiring Calpine in 2018, we have focused on unlocking value and driving future potential growth avenues for the business, which we believe have been recognized through this combination. We truly cannot thank the Calpine team enough for their partnership and are excited to support their continued contributions to the Constellation team. Following the closing of the transaction, we will remain committed as a shareholder of Constellation, reflecting our high confidence in the continued value and growth potential created by this combination.”
– Tyler Reeder, president & managing partner of ECP
