Author: PPD Team Date: 14/01/2025
Constellation has announced its acquisition of Calpine in a cash and stock transaction valued at $16.4bn, including 50 million Constellation shares, $4.5bn in cash, and the assumption of $12.7bn in net debt.
The deal brings the total net purchase price to $26.6bn after factoring in expected cash generated by Calpine and tax attributes.
The transaction, expected to close by January 2026, is subject to regulatory approvals and customary conditions. Constellation plans to fund the cash portion using available resources and Calpine’s cash flow generated before closure.
The merger will create the largest clean energy provider, combining Constellation’s zero-emission nuclear expertise with Calpine’s low-carbon natural gas and geothermal generation capabilities. Together, they will serve 2.5 million customers with energy solutions designed to manage costs and support sustainability.
Financial benefits include immediate non-GAAP adjusted EPS accretion of over 20% in 2026 and at least $2 per share in subsequent years. The deal is projected to generate more than $2bn in annual free cash flow, enhancing Constellation’s capacity for reinvestment.
Calpine’s major shareholders, including ECP, Canada Pension Plan Investments, and Access Industries, have agreed to an 18-month lock-up on Constellation equity with a phased sales schedule.
Lazard and JP Morgan Securities are advising Constellation, with Kirkland & Ellis as legal counsel. Calpine is advised by Evercore, Morgan Stanley, Goldman Sachs, Barclays US, Latham & Watkins, and White & Case.