(Bloomberg) — Constellation Energy Corp. agreed to acquire closely held Calpine Corp. for $16.4 billion to add scores of power generation assets across the US as the nation’s electricity demand is forecast to surge.
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Constellation will pay a mixture of cash and stock, the companies said Friday in a statement. Bloomberg News first reported earlier this week that the companies were nearing a deal Constellation will also assume about $12.7 billion of Calpine’s net debt. Its shares rose 5% in pre-market trading in New York.
The takeover would be one of the largest for a US power generation company, and crystallize a substantial return for Calpine shareholders Energy Capital Partners, Canada Pension Plan Investments and Access Industries who together took the company private for $5.5 billion in 2018.
Constellation is seeking to expand as energy consumption in the US is surging. Demand for electricity will grow almost 16% during the next five years, driven by data centers running artificial intelligence operations, new factories and electrification of everything from cars to home heating. All that is making power-plant owners more valuable, with Constellation’s share price climbing more than 90% last year.
When Constellation was spun off from utility owner Exelon Corp. in 2022, Chief Executive Officer Joseph Dominguez said he would be interested in growing the company through acquisitions. The following year, Constellation bought NRG Energy Inc.’s 44% stake in a Texas nuclear plant in a $1.75 billion deal.
But that is dwarfed by the deal for Calpine, in both scale and value. Constellation operates natural gas and hydroelectric power facilities and the biggest US nuclear fleet, with a total 32.4 gigawatts of capacity. A gigawatt is comparable to a conventional nuclear plant, and is enough to power more than 850,000 average US households. With Calpine, it will be adding 78 plants in 22 states with a generating capacity of 27 gigawatts.
Constellation is paying 7.9 times estimated 2026 earnings, according to Friday’s statement.
(Adds net debt and shares in second paragraph, deal multiple in last paragraph.)
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