Constellation Buys Rival Calpine For $16.4 Billion, Forming Largest 'Clean Energy' Producer In The US

Combined, they will have a capacity of 60 gigawatts from nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration and battery storage

Constellation and Calpine — Constellation Energy, the owner of Three Mile Island in Pennsylvania, will refurbish the nuclear reactor to supply Microsoft with electricity to power its AI data centers. Constellation announced it purchased Calpine Corp. in a $16.4 billion deal on Friday. Chip Somodevilla/Getty Images

Nuclear power plant operator Constellation Energy's stock shot up 25% on Friday after it announced it will purchase natural gas and geothermal company Calpine Corp. for $16.4 billion, creating the nation's largest clean energy provider.

The cash and stock deal is made up of 50 million shares of Constellation stock and $4.5 billion in cash. It will also assume about $12.7 billion in Calpine debt for a total purchase price of $26.6 billion, Constellation said Friday.

The combination of the two companies forms the nation's leading competitive retail electric supplier at a time when artificial intelligence development is expected to create record demand for electricity to power AI data centers.

"This acquisition will help us better serve our customers across America, from families to businesses and utilities," Joe Dominguez, president and CEO of Baltimore-based Constellation, said.

"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," he said.

The two companies will have about 60 gigawatts of capacity from zero- and low-emission sources, including nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration and battery storage.

They will have a "footprint" across the country with a "significantly expanded" presence in Texas, California, Delaware, New York, Pennsylvania and Virginia.

"Together, we will be better positioned to bring accelerated investment in everything from zero-emission nuclear to battery storage that will power our economy in a way that puts people and our environment first," Andrew Novotny, president and CEO of Calpine.

"It's a win for every American family and business in our newly combined footprint that wants clean and reliable energy," he added.

By 2 p.m. EST on Friday Constellation's share price was up more than $62 to trade at $306.