American Water & Essential Utilities proposed merger progresses

American Water Works Company, Inc. (NYSE: AWK) and Essential Utilities, Inc. (NYSE: WTRG) continue to make progress toward completing their proposed all-stock merger, which was announced on October 27, 2025. The Public Utilities Commission of Ohio (PUCO) recently approved the transaction, marking the second regulatory approval in less than a month. This follows the merger’s approval by the Public Utilities Commission of Kentucky on April 21, 2026.

The merger, which received overwhelming shareholder approval in February 2026, is expected to create a combined utility company serving over 4.7 million water and wastewater connections and more than 740,000 gas connections across 17 states and 18 military installations. The combined company will operate under the American Water name and maintain its headquarters in Camden, New Jersey.

Under the terms of the agreement, Essential shareholders will receive 0.305 shares of American Water for each share of Essential they own, representing a 10% premium based on the 60-trading-day average stock price as of October 24, 2025. Upon completion, American Water shareholders will own approximately 69% of the combined company, while Essential shareholders will own approximately 31%.

The merger is expected to be accretive to American Water’s earnings per share (EPS) in the first year following the close and to maintain long-term EPS and dividend growth targets of 7-9%. The combined company will also benefit from increased geographic diversity, operational efficiency, and a stronger balance sheet.

The transaction remains subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act and approvals from remaining public utility commissions. If all conditions are met, the merger is expected to close by the end of the first quarter of 2027.

Both companies have emphasized that the merger will not result in immediate changes to customer rates or employee compensation and benefits. The combined company also plans to maintain its commitment to water affordability and community engagement.

Investors and stakeholders can find additional details about the merger at americanwateressentialutilitiesmerger.com.