Constellation Energy Stock Surges After Agreeing to Buy Calpine

Constellation Energy (CEG) shares surged on Friday, January 12, 2025, following the announcement of a deal to acquire natural gas and geothermal power generator Calpine Corporation. The acquisition, valued at $26.6 billion, is set to create the largest clean energy provider in the U.S., serving 2.5 million customers and expanding Constellation's presence in key markets like Texas, California, and the Northeast.



The cash and stock transaction consists of 50 million shares of Constellation stock and $4.5 billion in cash, with Constellation also assuming $12.7 billion of Calpine's net debt. The combined company will have nearly 60 gigawatts of capacity from zero- and low-emission sources, including nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration, and battery storage.

Constellation expects the acquisition to add more than $2 billion in adjusted free cash flow per year and $2 in earnings per share (EPS) beyond 2026. The transaction is expected to close within 12 months, subject to regulatory approvals.



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

Constellation's acquisition of Calpine is a strategic move that expands its clean energy portfolio and geographic reach, positioning the company to capitalize on the growing demand for reliable and sustainable power sources. As the energy landscape continues to evolve, investors will be watching to see how Constellation's stock performs in the wake of this significant acquisition.