Calpine sold to Constellation Energy for $16.4bn

March 2025 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

March 2025 Issue

In one of the biggest acquisitions in the history of the US power industry, US nuclear power provider Constellation Energy has agreed to acquire natural gas and geothermal company Calpine Corp for $16.4bn.

Under the terms of the deal, Constellation will buy Calpine for $4.5bn in cash, 50 million Constellation shares and $12.7bn in net debt. According to a statement announcing the deal, the $26.6bn net acquisition price represents an enterprise value multiple of 7.9 times the company’s 2026 anticipated earnings before interest, taxes, depreciation and amortisation (EBITDA). 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

The deal is expected to close within 12 months of signing, subject to the satisfaction of customary closing conditions. Following completion, Constellation will continue to be headquartered in Baltimore and will maintain a significant presence in Houston, where Calpine is currently headquartered.

As a result of the deal, Constellation, which already owns the biggest nuclear fleet in the US, will becomes the country’s largest clean energy power provider. Constellation’s nuclear fleet, together with its renewable energy assets, already provides about 10 percent of the US’s emissions-free energy.

The acquisition of Calpine’s low-emission natural gas generation and expanded renewable energy portfolio, including the largest geothermal generation operation in the US, will see Constellation create the cleanest and most reliable generation portfolio in the country, with nearly 60GW of capacity from zero- and low-emission sources, including nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration and battery storage, Constellation said.

The combined company’s footprint will include a “significantly expanded” presence in Texas, the fastest growing market for power demand in the country, and other key strategic states, including California, Delaware, New York, Pennsylvania and Virginia.

“This acquisition will help us better serve our customers across America, from families to businesses and utilities,” said Joe Dominguez, president and chief executive of Constellation. “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.

“Both companies have been at the forefront of America’s transition to cleaner, more reliable and secure energy, and those shared values will guide us as we pursue investments in new and existing clean technologies to meet rising demand,” he added.

“This is an incredible opportunity to bring together top tier generation fleets, leading retail customer businesses and the best people in our industry to help drive a stronger American economy for a cleaner, healthier and more sustainable future,” said Andrew Novotny, president and chief executive of Calpine. “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.

“It’s a win for every American family and business in our newly combined footprint that wants clean and reliable energy,” he continued. “ECP’s commitment to these goals over the last seven years was critical to the progress we have made as a company and to laying a foundation for future growth.”

“Since acquiring Calpine in 2018, we have focused on unlocking value and driving future potential growth avenues for the business, which we believe have been recognized through this combination,” said Tyler Reeder, president and managing partner of ECP. “Following the closing of the transaction, we will remain committed as a shareholder of Constellation, reflecting our high confidence in the continued value and growth potential created by this combination.”

Richard Summerfield