Constellation to Acquire Calpine in $26.6 Billion Deal

Constellation Energy said January 10 it will acquire privately held Calpine in a cash-and-stock deal valued at $26.6 billion, giving the combined company about 60 gigawatts (GW) of power generation capacity from no- or low-emissions sources at a time when power demand is expected to rise thanks to the continued emergence of large-scale data centers.

Constellation is one of several companies positioning itself to provide power for data centers, which are expected to boost U.S. power demand to record levels. As we noted in We’ll Be Together, Constellation inked a 20-year power purchase agreement (PPA) with Microsoft in September 2024 to restart Unit 1 at the Three Mile Island nuclear station near Middletown, PA. Unit 1 has been offline since 2019, when it was closed for economic reasons in the face of steep competition from lower natural gas costs and renewables.

The acquisition of Calpine, which operates a large fleet of natural-gas-fired power plants across several states, should also help it meet the expected surge in demand. As we detailed in Dive In, gas-fired plants are increasingly seen as the best option to provide the reliable, around-the-clock electricity that large-scale data centers need.

Constellation will buy Calpine with 50 million of its shares and $4.5 billion in cash. It will also assume about $12.7 billion in Calpine debt. The combined company would be the nation’s leading retail power supplier with 2.5 million customers. The transaction, which is expected to close in the second half of 2025, will need regulatory approvals from the Federal Energy Regulatory Commission and other regulatory agencies.