Constellation buying Calpine in $26.6 billion deal that would join two huge US power companies

Jan 10, 2025

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Constellation is buying power natural gas and geothermal power provider Calpine for $16.4 billion, joining together two of the country’s biggest power companies.

The transaction includes 50 million shares of Constellation stock, $4.5 billion in cash and the assumption of approximately $12.7 billion of Calpine debt. When accounting for cash expected to be generated by Calpine between signing and the expected closing date of the deal, and the value of tax attributes at Calpine, the companies put the purchase price at $26.6 billion.

The combined business 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 buyout will also create the nation’s leading retail electric supplier, serving 2.5 million customers, the companies said Friday.

“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,” Constellation CEO Joe Dominguez said in a prepared statement Friday.

The deal is anticipated to add more than $2 billion of free cash flow a year, which the companies said will create strategic capital and scale to reinvest in the business.

The transaction is expected to close within a year of its signing. It will need regulatory approvals from the Federal Energy Regulatory Commission, the Canadian Competition Bureau, the New York Public Service Commission, the Public Utility Commission of Texas and other regulatory agencies.

Privately held Calpine is based in Houston. Shares of Constellation Energy Corp., based in Baltimore, surged more than 13% before the market open.

Michelle Chapman, The Associated Press

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