Constellation Energy Corporation (Nasdaq: CEG) has recently acquired Calpine Corporation in a cash-and-stock deal worth $16.4 billion. The deal also includes the assumption of $12.7 billion in net debt, bringing the total purchase price to $26.6 billion after considering tax attributes and expected cash flow. This strategic move combines two strong forces into the nation’s largest provider of clean and reliable energy, aiming to meet the growing demand for sustainable energy solutions.

Joe Dominguez, President and CEO of Constellation, remarked, “This acquisition will help us better serve our customers across America, from families to businesses and utilities.” The collaboration between Constellation’s expertise in zero-emission nuclear energy and Calpine’s advanced natural gas and geothermal operations will create an unparalleled energy portfolio.

Creating a Clean Energy Powerhouse

The combined entity will utilize a diverse mix of nuclear, natural gas, geothermal, hydro, solar, and wind energy. Constellation is already the largest producer of emissions-free electricity in the U.S. Now, the company will integrate Calpine’s geothermal facilities, including the Geysers in Northern California—considered the largest such facility in the nation—to enhance its generation capacity by nearly 60 gigawatts.

This acquisition will strengthen Constellation’s role as a competitive retail electricity supplier, serving 2.5 million homes and businesses with clean energy solutions. Customers are expected to benefit from tailored products integrating nuclear, natural gas, and renewable energy, leading to greater sustainability and improved cost management.

Strategic and Financial Benefits

The merger offers compelling financial advantages. Constellation expects immediate adjusted operating earnings per share (EPS) growth exceeding 20% by 2026 and annual free cash flow gains of more than $2 billion. The deal is projected to bolster Constellation’s capacity to reinvest in clean energy projects, from nuclear advancements to battery storage and renewable expansions.

“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,” Dominguez added. Notably, Constellation plans to extend the life of its existing clean energy sources, restart the Crane Clean Energy Center in Pennsylvania, and explore new nuclear projects.

Complementary Strengths

Headquartered in Baltimore, Constellation Energy Corporation is a Fortune 200 company and the largest producer of clean, emissions-free energy in the U.S. Its nuclear, solar, and wind assets power 16 million homes, driving the nation’s transition to carbon-free energy.

Calpine Corporation operates 79 energy facilities across 22 states, specializing in natural gas and geothermal power generation. The company’s modern and flexible fleet makes it a significant contributor to America’s low-carbon energy sector.

Calpine’s low-emission natural gas fleet ensures reliability during America’s transition to cleaner energy. Both companies have demonstrated leadership in carbon sequestration, paving the way for a future where natural gas complements renewable energy integration.

Andrew Novotny, President and CEO of Calpine, remarked, “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.”

Post-merger, Novotny will lead Calpine’s operations under Constellation’s umbrella, ensuring continuity and leveraging his expertise in energy generation.

Community and Environmental Commitment

Beyond energy production, the merger emphasizes community investment and sustainability. These two companies will contribute over $21.1 million annually to philanthropy, support workforce development, and create economic opportunities in local communities. This merger aims to build a stronger, cleaner, and healthier America.

Path to Completion

The deal is expected to close within 12 months, pending regulatory approvals and customary conditions, including clearance under the Hart-Scott-Rodino Act. Constellation will maintain its headquarters in Baltimore after the merger while continuing significant operations in Houston, Calpine’s current base.

Constellation’s advisors for the deal include Lazard and J.P. Morgan, while Calpine engaged Evercore and Morgan Stanley. Legal counsel was provided by Kirkland & Ellis for Constellation and Latham & Watkins for Calpine.