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Constellation Energy’s deal to buy Calpine is being driven by fast-rising demand for electricity by the technology industry.
Jan. 10, 2025Updated 7:57 a.m. ET
Constellation Energy, the nation’s largest nuclear power plant operator, has agreed to buy another electricity producer, Calpine, for $16.4 billion. The deal reflects the key role that natural gas is likely to play in meeting fast-rising U.S. electricity demand.
The cash-and-stock deal, announced Friday, ranks among the power sector’s biggest. It would broaden Constellation’s portfolio as companies like Microsoft, Google and Amazon are scrambling to secure energy for data centers used to run artificial intelligence and other services.
Calpine, which is based in Houston and privately held, operates a large fleet of natural gas power plants in several states as well as the Geysers geothermal energy complex in California.
Constellation, which is based in Baltimore, said in a statement that it expected Calpine’s natural gas assets to help ensure the reliability of the electric grid. The combination also would broaden the company’s presence in Texas, where power demand is growing quickly, and add more renewable energy to its portfolio.
“By combining Constellation’s unmatched expertise in zero-emission nuclear energy with Calpine’s industry-leading, best-in-class, low-carbon natural gas and geothermal generation fleets, we will be able to offer the broadest array of energy products and services available in the industry,” said Joseph Dominguez, chief executive of Constellation.
Constellation would pay $4.5 billion in cash and assume roughly $12.7 billion of Calpine’s debt as part of the deal.
