What is the total price Constellation is paying for Calpine?

The equity purchase price is about $16.4 billion, made up of 50 million CEG shares (about $11.9 billion at the $237.98 20-day VWAP) and $4.5 billion in cash. Including the assumption of about $12.7 billion of Calpine net debt, the enterprise value is $29.1 billion, or $26.6 billion effective after adjusting for retained cash and tax attributes.

How will the deal affect Constellation's earnings and cash flow?

Management expects the transaction to be immediately accretive to adjusted operating EPS by more than 20% in 2026 and by at least $2.00 per share annually through 2029. It is also projected to add more than $2 billion of annual free cash flow before growth. These are non-GAAP projections and the filing cautions they are not forecasts of future results.

What regulatory approvals are needed and when is closing expected?

Required approvals include HSR antitrust clearance, FERC, the New York Public Service Commission, the Public Utility Commission of Texas, and the Canadian Competition Bureau, along with other state and regulatory agencies. Closing is expected within 12 months of signing, and the investor presentation targets 4Q 2025. FERC may require limited PJM asset sales to address market power concerns.

Will Constellation keep its investment-grade credit rating?

Management expects Moody's (Baa1) and S&P (BBB+) to affirm its ratings with stable outlooks. The company plans to avoid acquisition debt, use free cash flow and new issuance to retire Calpine's higher-coupon debt, and return to target credit metrics by year-end 2027.

What are the main risks to the transaction?

Risks include failure to obtain or delays in regulatory approvals, conditions imposed by regulators that could lead the parties to abandon the deal, difficulties integrating the businesses, failure to achieve expected synergies, and events that could trigger termination of the merger agreement. The filing also notes that the definitive agreement will be filed separately, so its full terms are not yet public in this document.

CEG 8-K: Regulation FD — Jan 10, 2025

01—Abstract

Summary

Summary of the 8-K filed January 10, 2025. Cited figures are marked; the original filing is the authoritative source.

Constellation Energy (CEG) announced on January 10, 2025 a definitive agreement to acquire Calpine Corporation in a combined cash and stock transaction.

The equity purchase price is approximately $16.4 billion^a, consisting of 50 million CEG shares (valued at the $237.98 20-day VWAP, or about $11.9 billion) and $4.5 billion in cash. Including the assumption of roughly $12.7 billion of Calpine net debt, the enterprise value is $29.1 billion. After adjusting for Calpine's expected cash generation before closing and the net present value of its tax attributes, the effective enterprise value is $26.6 billion, which management characterizes as 7.9x 2026 EV/EBITDA.

Management projects the deal will be immediately accretive to adjusted (non-GAAP) operating EPS, by more than 20% in 2026 and by at least $2.00^b per share in subsequent years through 2029, and will add more than $2 billion of annual free cash flow before growth. The combined company would hold nearly 60 GW of capacity from zero- and low-emission sources, become the leading U.S. retail electricity supplier with about 2.5 million customers, and gain a significant presence in Texas. The pro forma company would also have roughly 16,500 employees.

Calpine's ECP-led owners would receive about 13.9%^c of the combined shares, subject to an 18-month phased lock-up. Investors should weigh the accretion and growth benefits against meaningful execution risk. The transaction requires approvals from the FTC/DOJ (HSR), FERC, the New York Public Service Commission, the Texas PUC, the Canadian Competition Bureau and other regulators, and management has indicated limited PJM asset sales may be needed to address market power concerns.

Constellation expects to keep its Baa1/BBB+ investment-grade ratings but plans to use cash flow and new debt to retire Calpine's higher-coupon debt, with a return to target credit metrics by year-end 2027. Closing is targeted within 12 months of signing, with management's presentation indicating 4Q 2025. Note that the filing itself is a Regulation FD disclosure, and the definitive agreement will be filed separately under Item 1.01.

02—Key points

Key Highlights

Acquisition of Calpine for an equity purchase price of about $16.4B (50M CEG shares plus $4.5B cash) and a $29.1B enterprise value including $12.7B of net debt.
Effective enterprise value of $26.6B after adjusting for Calpine's retained cash and the NPV of tax attributes, implying a 7.9x 2026 EV/EBITDA multiple.
Immediate adjusted EPS accretion of more than 20% in 2026 and at least $2.00 per share annually through 2029, plus more than $2B of annual incremental free cash flow before growth.
Creates the largest U.S. clean energy producer with nearly 60 GW of zero- and low-emission capacity and the leading U.S. retail electricity supplier with about 2.5 million customers.
Calpine's ECP-led owners receive about 13.9% of pro forma shares, with an 18-month phased lock-up, signaling shareholder alignment.
Constellation expects to maintain investment-grade ratings (Baa1/BBB+ with stable outlooks) and to return to target credit metrics by year-end 2027, funding debt retirement without acquisition debt.
Key risks include regulatory approvals (DOJ/HSR, FERC, NY PSC, Texas PUC, Canadian Competition Bureau), possible PJM asset divestitures, and integration execution; closing is targeted within 12 months of signing (4Q 2025 per the investor presentation).

03—Questions

Frequently Asked Questions

What is the total price Constellation is paying for Calpine?
The equity purchase price is about $16.4 billion, made up of 50 million CEG shares (about $11.9 billion at the $237.98 20-day VWAP) and $4.5 billion in cash. Including the assumption of about $12.7 billion of Calpine net debt, the enterprise value is $29.1 billion, or $26.6 billion effective after adjusting for retained cash and tax attributes.
How will the deal affect Constellation's earnings and cash flow?
Management expects the transaction to be immediately accretive to adjusted operating EPS by more than 20% in 2026 and by at least $2.00 per share annually through 2029. It is also projected to add more than $2 billion of annual free cash flow before growth. These are non-GAAP projections and the filing cautions they are not forecasts of future results.
What regulatory approvals are needed and when is closing expected?
Required approvals include HSR antitrust clearance, FERC, the New York Public Service Commission, the Public Utility Commission of Texas, and the Canadian Competition Bureau, along with other state and regulatory agencies. Closing is expected within 12 months of signing, and the investor presentation targets 4Q 2025. FERC may require limited PJM asset sales to address market power concerns.
Will Constellation keep its investment-grade credit rating?
Management expects Moody's (Baa1) and S&P (BBB+) to affirm its ratings with stable outlooks. The company plans to avoid acquisition debt, use free cash flow and new issuance to retire Calpine's higher-coupon debt, and return to target credit metrics by year-end 2027.
What are the main risks to the transaction?
Risks include failure to obtain or delays in regulatory approvals, conditions imposed by regulators that could lead the parties to abandon the deal, difficulties integrating the businesses, failure to achieve expected synergies, and events that could trigger termination of the merger agreement. The filing also notes that the definitive agreement will be filed separately, so its full terms are not yet public in this document.

04—Continue

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