Constellation Energy's $27bn Bid for Calpine: A Clean Energy Giant Emerges

Deal News | Jan 10, 2025 | EIN

Constellation Energy and Calpine have announced plans for a major merger valued at $27 billion, aiming to create a leading producer of clean and reliable energy. The deal involves Constellation purchasing Calpine through a combination of cash and stock, with an equity purchase price of $16.4 billion and the assumption of $12.7 billion in debt. This transaction is structured to consider Calpine's expected cash generation and tax attributes, valuing the company at 7.9 times its EBITDA. The merger is intended to enhance service capabilities to customers across the United States, with a strong commitment towards advancing clean energy technologies. Constellation's CEO, Joe Dominguez, emphasized the shared values of both companies in facilitating America's transition to cleaner energy solutions.

Sectors

Energy
Renewable Energy

Geography

United States – Both Constellation Energy and Calpine are US-based companies, and the merger is expected to impact the American energy landscape significantly.

Industry

Energy – Both Constellation Energy and Calpine operate within the energy sector, focusing on the production of clean and reliable energy solutions. The merger is significant in supporting the growing demand for sustainable energy in the US.
Renewable Energy – The transaction is driven by a commitment to clean energy technologies, highlighting a strategic focus on reducing carbon footprint and enhancing renewable energy solutions.

Financials

$27 billion – Total value of the merger deal between Constellation Energy and Calpine.
$16.4 billion – Equity purchase price for Calpine as part of the merger transaction.
$12.7 billion – Amount of Calpine's debt that Constellation will assume through the merger.
7.9 times EBITDA – Valuation multiple for Calpine based on its EBITDA, used to determine the net purchase price.
$278.87 – Stock price of Constellation Energy ahead of the merger announcement, up by 14%.

Participants

Name	Role	Type	Description
Constellation Energy	Bidding Company	Company	Constellation Energy is a leading energy company in the US, engaged in providing clean and reliable energy solutions.
Calpine	Target Company	Company	Calpine is an American electricity generation company that is involved in providing low-carbon energy solutions.
Joe Dominguez	CEO of Constellation Energy	People	Joe Dominguez is the president and chief executive officer of Constellation Energy and has emphasized the importance of the merger in advancing clean energy technologies.