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Constellation To Acquire Calpine, Creating Nation's Largest Retail Supplier, In Cash & Stock Transaction
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Constellation and Calpine Corp. today announced that 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, composed of 50 million shares of Constellation stock and $4.5 billion in cash plus the assumption of approximately $12.7 billion of Calpine net debt.
After accounting for cash that is expected to be generated by Calpine between signing and the expected closing date, as well as the value of tax attributes at Calpine, the net purchase price is $26.6 billion, which Constellation said reflects, "an attractive acquisition multiple of 7.9x 2026 EV/EBITDA."
The combined company will serve 2.5 million customers as a retail electric supplier
Calpine has 27.7 GW of operating capacity across 79 plants, and
a retail platform with ~59 TWh annual load.
Calpine has 9.6 GW of generation in Texas
Calpine's retail business has 243,000 C&I and residential
customers across 17 states
Constellation said that, post-acquisition, Constellation will serve 200 million MWhs at retail (annualized customer load), outpacing NRG which is listed as serving 151 million MWhs
During an investor call, Constellation said that it does expect certain divestitures will be undertaken for regulatory approval
"Limited PJM asset sales will be proposed to mitigate any potential market power concern," Constellation said
"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," Constellation said
"Customers also will enjoy more predictability and competitive prices as a result of the two companies’ complementary generation assets, load, fuel diversity, geographies and product offerings," Constellation said
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, Constellation said
Constellation said that Calpine operates the largest geothermal generation operation in the U.S.
"The combined company’s footprint will span the continental U.S. and include a significantly expanded presence in Texas, the fastest growing market for power demand, as well as other key strategic states, including California, Delaware, New York, Pennsylvania and Virginia," Constellation said
Joe Dominguez, president and CEO, Constellation, stated, "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 said that Constellation, "will 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 and increasing the output of existing nuclear plants, in addition to restarting the Crane Clean Energy Center in Pennsylvania."
Constellation said, "The transaction will deliver benefits to Constellation’s owners, with expected immediate adjusted (non-GAAP) operating earnings per share (EPS) accretion of more than 20% in 2026 and at least $2 per share of EPS accretion in future years. The transaction is projected to add more than $2 billion (non-GAAP) of free cash flow annually, creating strategic capital and scale to reinvest in the business. Constellation’s base earnings outlook is expected to continue growing at a double-digit rate through the decade. Constellation remains committed to a strong, investment-grade balance sheet with current ratings expected to be affirmed by S&P and Moody’s."
Constellation stated, "The cash and stock transaction will have a value of approximately $16.4 billion, composed of 50 million shares of Constellation stock using the trailing 20-day VWAP of $237.98 and $4.5 billion in cash plus the assumption of approximately $12.7 billion of Calpine net debt. Constellation expects to fund the cash portion of the transaction through a combination of cash on hand and cash flow generated by Calpine in the period between signing and closing of the transaction (that will be assumed at closing)."
"Reflecting their confidence in Constellation’s growth and value creation through this acquisition, Calpine’s significant shareholders, including ECP, Canada Pension Plan Investments (CPP Investments) and Access Industries, have agreed to an 18-month lock-up with respect to their equity ownership of Constellation common stock, subject to an agreed upon schedule for potential sales," Constellation said
After closing, Calpine CEO Andrew Novotny will continue to lead the Calpine business as President of Calpine and will serve as EVP of Constellation
Constellation President and CEO Joe Dominguez will continue to lead Constellation
Following the close of the transaction, Constellation will continue to be headquartered in Baltimore and will continue to maintain a "significant presence" in Houston, where Calpine is currently headquartered, Constellation said
The transaction is expected to close within 12 months of signing, subject to the satisfaction of customary closing conditions, including the expiration or termination of the waiting period pursuant to the Hart-Scott-Rodino Act, and 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.
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Reporting by Paul Ring • ring@energychoicematters.com
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