Power Industry Shake-Up: Constellation Energy to Buy Calpine in Massive $26.6B Deal

US-based nuclear power giant Constellation Energy has announced a landmark deal to acquire privately-held natural gas and geothermal company Calpine Corp for $16.4 billion in a move that reshapes the American energy landscape. The acquisition, one of the largest in the history of the U.S. power sector, comes at a time of surging electricity demand driven by the rapid expansion of energy-intensive technologies like artificial intelligence and the ongoing electrification of transportation and buildings.

According to Yahoo the agreement will transform Constellation into the largest independent power provider in the United States, with a diverse portfolio spanning nuclear, natural gas, and geothermal energy sources. The deal, which also includes Calpine’s debt, values the transaction at $26.6 billion.

Following the announcement, Constellation’s stock surged by as much as 10% before markets opened, with gains extending to 22% shortly after trading began. The company expects the acquisition to close in the second half of 2025. Once finalized, the merger is projected to add $2 billion in annual free cash flow, further strengthening Constellation’s financial position.

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The acquisition reflects the growing urgency for reliable and sustainable energy solutions. Per Yahoo, the combined entity will boast nearly 60 gigawatts (GW) of low- and zero-emission capacity, allowing Constellation to solidify its position as a key player in the nation’s clean energy transition. CEO Joe Dominguez emphasized the critical need to meet rising energy demands, saying, “Demand for our products is expected to grow by levels we haven’t seen in a lifetime.”

The transaction significantly expands Constellation’s geographic footprint, particularly in the high-demand markets of Texas and California. With this deal, Constellation’s share of generation capacity in Texas will jump from 11% to 23%, while its presence in California will rise to 10%, up from a negligible amount. Both states rank among the most populous and energy-intensive in the country.

Aneesh Prabhu, an analyst with S&P, described the deal as transformative, noting that the merger will create “the largest coast-to-coast power generator” in the U.S. The acquisition will also boost Constellation’s workforce by 20%, adding approximately 2,750 employees to its ranks and bringing the total headcount to 16,500.

Source: Yahoo