Constellation Energy Surges on $16.4 Billion Deal to Buy Calpine

(Bloomberg) -- Constellation Energy Corp. surged after it agreed to acquire closely held Calpine Corp. for $16.4 billion to create the largest fleet of US power stations.

Shares of Constellation climbed as much as 23% in New York trading. Constellation will pay a mixture of cash and stock, and assume about $12.7 billion of Calpine’s net debt in the deal, the companies said Friday in a statement. 

Constellation is expanding as energy consumption in the US is forecast to grow at the fastest pace in decades. Demand will expand almost 16% during the next five years, according to a recent report from Grid Strategies, driven by data centers running artificial intelligence operations, plus new factories and the electrification of cars. The company’s stock price almost doubled last year on optimism about future AI-fueled growth.

The takeover would be one of the largest for a US power generation company, and crystallize a substantial return for Calpine shareholders Energy Capital Partners, Canada Pension Plan Investment Board and Access Industries, which together took the company private for $5.5 billion in 2018.

“We’ll generate more electricity than any company in the US,” once the deal is complete, Constellation Chief Executive Officer Joseph Dominguez said during a Friday conference call.

Constellation operates natural gas and hydroelectric power facilities and the biggest US nuclear fleet, with a total 32.4 gigawatts of capacity. Buying Calpine will be add 78 plants in 22 states with a generating capacity of 27 gigawatts, including the biggest US gas plant portfolio.

The deal will boost Constellation’s operating earnings per share by more than 20% in 2026 and by at least $2 in future years, the companies said. Constellation is paying 7.9 times estimated 2026 earnings. Bloomberg News first reported earlier this week that the companies were nearing a deal.

Lazard Inc. and JPMorgan Chase & Co. are financial advisers to Constellation on the deal, while Kirkland & Ellis is its legal counsel. Evercore is lead financial adviser to Calpine. Morgan Stanley, Goldman Sachs Group Inc. and Barclays Plc are additional financial advisers to Calpine and ECP, and Latham & Watkins and White & Case are serving as legal counsel.

(Updates with comment from CEO starting in fourth paragraph.)

©2025 Bloomberg L.P.