Constellation Energy Stock Surges on $16.4B Calpine Deal

Constellation Energy (CEG) shares surged on Friday, January 10, 2025, following the announcement of a $16.4 billion deal to acquire private energy company Calpine. The acquisition, valued at approximately $26.6 billion including debt, is expected to create the nation's largest clean energy provider, serving more customers coast-to-coast with a broader array of energy and sustainability products.



The cash and stock transaction consists of 50 million shares of Constellation stock and $4.5 billion in cash, along with the assumption of approximately $12.7 billion of Calpine net debt. The deal is expected to close within 12 months, subject to regulatory approvals.

The acquisition brings together 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. This combination will enable the company to offer the broadest array of energy products and services available in the industry, including nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration, and battery storage.

Calpine's low-emission natural gas plants will play a key role in maintaining grid reliability for decades to come as customers transition to cleaner energy sources. Both companies have been early investors in carbon sequestration technology to help ensure America's abundant natural gas can continue to reliably power customers. Constellation will also invest in adding more zero-emission energy to the grid by extending the life of existing clean energy sources, exploring new advanced nuclear projects, investing in renewables, and increasing the output of existing nuclear plants, in addition to restarting the Crane Clean Energy Center in Pennsylvania.

The transaction is expected to deliver immediate adjusted (non-GAAP) operating earnings per share (EPS) accretion of more than 20% in 2026 and at least $2 per share of EPS accretion in future years. It is also projected to add more than $2 billion (non-GAAP) of free cash flow annually, creating strategic capital and scale to reinvest in the business.



Constellation Energy shares were up over 23% at $300.50 in intraday trading on Friday, January 10, 2025, and have more than doubled in value over the past 12 months. The acquisition comes as energy stocks have surged over the past year, due in part to power demands from data centers to support artificial intelligence.

The deal is anticipated to expand Constellation's presence in key markets like Texas and California, enabling it to better serve customers with a broader range of energy and sustainability solutions. This positions Constellation to capitalize on the growing demand for clean energy, particularly in these strategic regions.

In conclusion, Constellation Energy's acquisition of Calpine is expected to create significant value for shareholders, enhance the company's clean energy offerings, and strengthen its position in key markets. The transaction is projected to deliver immediate and long-term financial benefits, as well as strategic capital and scale to reinvest in the business.