Constellation Energy (CEG) M&A Announcement summary

Deal rationale and strategic fit

• Creates the largest, cleanest, and most reliable U.S. power generation fleet, combining nuclear, natural gas, geothermal, and battery assets for coast-to-coast reach.

• Expands presence in key growth markets like Texas, California, and New England, reducing reliance on PJM and enhancing market diversification.

• Broadens customer solutions, enabling new and blended product offerings for over 2.5 million customers, including innovative sustainability solutions.

• Leverages both companies’ operational excellence, safety, and customer-centric cultures, strengthening community impact.

• Enhances ability to invest in zero-emission energy, advanced nuclear, renewables, and battery storage.

Financial terms and conditions

• Effective enterprise value of $26.6 billion, with $4.5 billion in cash and 50 million shares issued for an equity value of $16.4 billion; $12.7 billion net debt assumed.

• Enterprise value of $29.1 billion before adjustments; 7.9x 2026 EV/EBITDA multiple.

• Calpine’s major shareholders receive Constellation stock and have agreed to an 18-month lock-up period.

• No new debt or additional equity raised beyond shares exchanged; prudent financing structure supports credit ratings.

• Free cash flow before growth increases by at least $2 billion annually, supporting reinvestment and growth.

Synergies and expected cost savings

• Immediate adjusted operating EPS accretion of over 20% in 2026 and at least $2 per share in future years.

• Significant commercial synergies expected from cross-selling, operational optimization, and new product creation.

• Combined expertise in nuclear, gas, geothermal, and renewables will drive value creation and cost efficiencies.

• Projected to add more than $2 billion in annual free cash flow, supporting reinvestment and growth.

• Efficiencies and overlaps anticipated, with further details to be provided closer to deal closing.