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

[January 11, 2025]  By MICHELLE CHAPMAN

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

This undated photo provided by Constellation shows the Constellation Headquarters Building in Baltimore. ( Constellation via AP)

The acquisition would create the nation’s leading retail electric supplier, serving 2.5 million customers, the companies said Friday. It's geographic 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. The buyout will also create the

Constellation will buy Calpine with 50 million of its shares and $4.5 billion in cash. It will also assume about $12.7 billion in Calpine debt. The total value of the deal will be about $26.6 billion.

The combined company 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.

“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.

“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,” Calpine CEO Andrew Novotny said.

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 25% Friday.

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