Power producers Calpine, Constellation in $26.6bn merger

US power producer Constellation Energy said January 10 it had agreed to acquire Houston-based Calpine for a net purchase price of $26.6bn in a merger of Constellation’s largely nuclear power assets and those of Calpine, which generates most of its power from natural gas.

The net purchase price is comprised of $16.4bn in Constellation shares, $4.5bn in cash and the assumption of $12.7bn of Calpine debt, less cash that is expected to be generated by Calpine between signing and closing, expected within 12 months.

The merger agreement will create the largest clean energy provider in the US, with 60 GW of generating capacity from nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration and battery storage.

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

It will also create a retail electricity supplier serving some 2.5mn customers nationwide, with an expanded presence in Texas, the fastest growing power market in the US, and other key market such as California, Delaware, New York, Pennsylvania and Virginia.