BALTIMORE and HOUSTON (January 10, 2025) — Constellation (NASDAQ: CEG) and Calpine today entered into a definitive agreement under which Constellation will acquire Calpine in a cash and stock transaction for a stock purchase price valued at approximately JPY 1,000. announced that it had concluded. The $16.4 billion will consist of 50 million Constellation shares and $4.5 billion in cash, plus approximately $12.7 billion. Calpine’s net debt is $1 billion. Taking into account the cash expected to be generated by Calpine from the deal to the expected closing date, as well as the value of Calpine’s tax attributes, the net acquisition price is $26.6 billion, representing an attractive acquisition multiple of 7.9x 2026 EV/ It is reflected. EBITDA.
The deal creates the nation’s largest clean energy provider and opens up opportunities to offer a broader range of energy and sustainability products to more customers from coast to coast. Already the nation’s largest producer of 24/7 emissions-free electricity, Constellation joins Calpine, the nation’s largest energy producer with low-emission natural gas generation, and a renewable energy portfolio that includes the nation’s largest geothermal power generation operation. Add magnification. We also form one of the nation’s most competitive retail electricity suppliers, providing our 2.5 million customers with customized energy and sustainability solutions that help them manage their energy costs and achieve their sustainability goals. We offer a wide range of solutions and new products.
“This acquisition will allow us to better serve our customers across the United States, from homes to businesses and utilities,” said Joe Dominguez, President and CEO of Constellation. Ta. “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 power generation assets, we have the widest range of energy products available in the world. ” industry. Both companies have been at the forefront of America’s transition to cleaner, more reliable, and safer energy, and these shared values support the development of new and existing clean technologies to meet increasing demand. to guide you in pursuing investments in. What makes this combination even more special is the combination of some of the industry’s most talented individuals who share a noble passion for safety, sustainability, operational excellence, and helping America’s families, businesses, and communities thrive. It’s about bringing together two world-class teams, one female and one male. growing up. We look forward to welcoming the Calpine team once this transaction closes. ”
Calpine’s low-emission natural gas plants will play a critical role in maintaining power grid reliability for decades to come as customers transition to cleaner energy sources. Both companies have been early investors in carbon sequestration technology to ensure America’s abundant natural gas continues to reliably power customers. At the same time, in addition to restarting, Constellation will extend the lives of existing clean energy sources, explore new advanced nuclear projects, invest in renewable energy, and increase the output of existing nuclear power plants. invests in adding more zero-emissions energy to the grid. Crane Clean Energy Center of Pennsylvania;
“This is an exciting move to bring together top-tier power generation fleets, large retail customer companies, and industry leaders to help drive a cleaner, healthier American economy,” said Andrew Novotny, Calpine President and CEO. “This is a great opportunity to bring together some of our best talent.” sustainable future. Together, we will be in a position to accelerate investment in everything from zero-emission nuclear power to battery storage that powers the economy in a way that puts people and the environment first. This is a win for all American families and businesses in newly consolidated locations who want clean, reliable energy. ECP’s commitment to these goals over the past seven years has been critical to moving us forward as a company and laying the foundation for future growth. ”
“Since acquiring Calpine in 2018, we have focused on unlocking value and driving potential future growth avenues for the business,” said Tyler Reeder, President and Managing Partner of ECP. I believe that has been recognized through this integration.” We can’t 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 remain committed as shareholders of Constellation, reflecting our high confidence in the continued value and growth potential created by this combination. ”
The transaction will benefit Constellation owners, with immediate adjusted (non-GAAP) operating earnings per share (EPS) accretion of more than 20% in 2026 and future EPS of at least $2 per share. Expected to increase. The transaction is expected to generate additional free cash flow of more than $2 billion (non-GAAP) per year, creating strategic capital and scale for reinvestment in the business. Constellation’s underlying revenue outlook is expected to continue at double-digit growth rates throughout the decade. Constellation remains committed to maintaining a strong investment grade balance sheet, with its current ratings expected to be confirmed by S&P and Moody’s.
Strategic advantages:
A diverse coast-to-coast portfolio of zero-emission and low-emission power generation assets creates the cleanest and most reliable power generation portfolio in the United States and positions Constellation in the fastest-growing areas of electricity demand. Expand. Constellation and Calpine will jointly establish the company. It 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 spans the continental United States, with operations in Texas, the fastest growing market for electricity demand, as well as other key strategic states such as California, Delaware, New York, Pennsylvania, and Virginia. This will significantly expand its presence.
Combining our best-in-class retail and commercial business with our best-in-class customer solutions platform to establish a global presence and deliver more energy and sustainability products to more customers to meet growing demand provide an opportunity. Trade will expand. Constellation’s industry-leading customer solutions business positions the combined company as America’s leading retail electricity provider, enabling 2.5 million homes and businesses across the country to meet their energy and sustainability needs. We will support you. The combined company will offer customers a broader range of reliable energy solutions, including new products that can integrate nuclear, renewable and natural gas technologies to meet customers’ specific needs. Customers will also enjoy greater predictability and competitive pricing as a result of the complementarity of the companies’ generation assets, loads, fuel diversity, geographies and product offerings. Strengthens Constellation’s position as the largest clean energy producer with the lowest carbon intensity in the U.S.: Constellation is already the nation’s top clean energy producer, providing 10% of the nation’s emissions-free energy . The Calpine-Constellation merger further expands this position by expanding Constellation’s renewable energy portfolio, which includes the Geysers facility in Northern California, the largest geothermal power plant in the United States. The combined company is poised for further growth through increased scale and cash flow.
You will join a proven, experienced, best-in-class team with a strong culture of safety, operational excellence, and service to our customers, community, and country. Constellation and Calpine employees share a passion for providing America’s families and businesses with energy that is reliable, clean and available whenever they need it. Both companies are recognized throughout the industry for operating with the highest levels of safety, efficiency and reliability, and for providing competitive products that enable customers to cost-effectively meet their energy needs. I am an innovator. Following the closure, Calpine CEO Andrew Novotny will continue to lead Calpine’s business, bringing decades of energy expertise and leadership to Constellation.
Strengthen our shared commitment to supporting clean, healthy and growing communities through workforce development, philanthropy and community investment: Together, the combined company will increase positive impact and create jobs, jobs, and growing communities. Act as an economic engine for the community through tax payments and other economic activities. The combined company will focus on economically disadvantaged communities and will invest more than $21.1 million annually in foundation, corporate and employee philanthropy, as well as thousands of hours of employee volunteer work. We will continue to contribute to the
Additional transaction details
The cash and stock transaction was valued at approximately $16.4 billion, with a trailing 20-day VWAP of $237.98 for 50 million Constellation shares and $4.5 billion in cash, plus the assumption of approximately $12.7 billion in Calpine net debt. Consists of. Constellation expects to fund the cash portion of the transaction through a combination of cash reserves and cash flows generated by Calpine from signing to closing, expected at closing.
Reflecting confidence in Constellation’s growth and value creation through this acquisition, Calpine’s major shareholders, including ECP, Canada Pension Plan Investments (CPP Investments), and Access Industries, have announced that they have an 18-year stake in Constellation’s equity ownership. I agreed to lock up the moon. common stock, subject to a potential sale schedule being agreed upon.
The transaction is subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act and regulatory approval from the Federal Energy Regulatory Commission, within 12 months of signing. It is scheduled to be completed by. Competition Bureau of Canada, New York Public Service Commission, Public Utilities Commission of Texas and other regulatory agencies.
Upon completion of the transaction, Constellation will continue to be headquartered in Baltimore and will maintain a significant presence in Houston, where Calpine is currently headquartered.
advisor
Mr. Lazard serves as Constellation’s financial advisor. JP Morgan Securities LLC is also serving as financial advisor to Constellation, and Kirkland & Ellis is serving as legal advisor.
Evercore served as lead financial advisor to Calpine. Morgan Stanley & Co., Goldman Sachs & Co., and Barclays US are serving as additional financial advisors to Calpine and ECP, and Latham & Watkins and White & Case are serving as legal advisors.
Conference call and webcast information
Constellation plans to hold a conference call today, January 10, 2025 at 8:30 a.m. Eastern Time, to discuss this announcement.
A live audio webcast of the conference call, including presentation slides, is available at https://investors.constellationenergy.com.
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