Constellation will acquire Calpine in a cash and stock transaction valued at a stock purchase price of $16.4 billion.
This consists of 50 million Constellation shares and $4.5 billion in cash, plus the assumption of $12.7 billion in net debt from Calpine.
Constellation intends to finance the cash portion of the transaction using a mix of available cash and cash flow generated by Calpine from the time of signing through the closing of the deal.
After taking into account the cash expected to be generated by Calpine between signing and the expected closing date, along with the value of the tax attributes at Calpine, the net purchase price is $26.6 billion.
The transaction is expected to close in January 2026, subject to regulatory approvals and the satisfaction of customary closing conditions.
Constellation President and CEO Joe Dominguez said, “This acquisition will help us better serve our customers across America, from families to businesses and utilities.
“By combining Constellation’s unparalleled 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 range of energy products and services available in the sector. the industry.”
The agreement creates the largest clean energy provider, serving 2.5 million customers with customized energy solutions and products to control costs and support sustainability goals.
The transaction will benefit Constellation’s owners, with expected immediate adjustments (non-generally accepted accounting principles). [GAAP]) an increase in operating earnings per share (EPS) of more than 20% in 2026 and an increase in earnings per share of at least $2 per share in the coming years.
It is expected to add more than $2 billion (non-GAAP) in free cash flow annually, creating strategic capital and scale to reinvest in the business.
Calpine President and CEO Andrew Novotny said: “This is an incredible opportunity to bring together top-generation fleets, leading retail customers 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 accelerate investments in everything from zero-emission nuclear power to battery storage, which will power our economy in a way that puts people and our environment first.”
Calpine’s major shareholders, including ECP, Canada Pension Plan Investments and Access Industries, have agreed to an 18-month lock-up on their Constellation shares, with a schedule for potential sales.
Lazard and JP Morgan Securities are serving as financial advisors to Constellation, with Kirkland & Ellis serving as legal advisor.