One of the largest mergers in the power generation sector! Constellation is close to acquiring Calpine for nearly $30 billion

Energy giant Constellation is set to acquire Calpine, potentially becoming the largest merger in the power generation industry.

On Wednesday Eastern Time, Bloomberg cited sources familiar with the matter, revealing that Baltimore-based Constellation Energy is in negotiations with Calpine's private equity investors regarding the acquisition. The deal is valued at approximately $30 billion (including debt) and is expected to become one of the largest mergers in the history of the power generation industry.

Sources indicated that the final announcement of the deal is expected to be released in the coming weeks, but negotiations are still ongoing, and the final price and related terms of the deal may still change, with the possibility of delays or even cancellation.

Calpine, founded in the 1980s, is one of the largest independent power producers in the United States, operating nearly 80 power generation facilities across 22 states and Canada. The company primarily generates electricity using natural gas and geothermal resources, providing power to approximately 27 million households each year. In 2017, Energy Capital Partners, the Canada Pension Plan Investment Board (CPP Investments), and Access Industries privatized Calpine for over $17 billion (including debt).

Constellation Energy is one of the leading clean energy companies in the United States, with a market capitalization of approximately $79 billion, and its stock price has more than doubled over the past year.

For years, electricity demand in the United States has remained relatively stable. However, in recent years, electricity demand has surged rapidly due to the expansion of AI-operated data centers, the establishment of new factories, and the comprehensive electrification of everything from automobiles to home heating. According to a report by Grid Strategies, U.S. electricity demand is expected to soar nearly 16% over the next five years.

This trend presents new development opportunities for the power generation industry and has fueled an increase in merger and acquisition activity. Data shows that last year, the total value of mergers and acquisitions in the power generation industry reached approximately $129 billion, a year-on-year increase of one-third. This includes significant transactions such as ECP and its investors acquiring Atlantica Sustainable Infrastructure Plc.

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