$Constellation Energy (CEG.US)$ Agreed to acquire the minority stake in Calpine Corp. for $16.4 billion, to increase dozens of power generation Assets across the USA. After the US stock market opened today, the company's stock soared over 23% against the trend.

The two companies stated in a statement on Friday that Constellation will pay in Cash / Money Market and Stocks. Constellation will also assume Calpine's net debt of about $12.7 billion.

This acquisition will be one of the largest acquisitions by a power generation company in the USA and will provide substantial returns for Calpine shareholders, Energy Capital Partners, Canada Pension Plan Investments, and Access Industries, who privatized the company for $5.5 billion in 2018.

With the surge in energy consumption in the USA, Constellation is seeking expansion. Power demand is expected to grow nearly 16% over the next five years, driven by the running of AI Operations in Datacenters, new plants, and the electrification of everything from Autos to home heating. All of this has driven up the Market Cap of power suppliers, with Constellation's stock price rising over 90% last year.

When Constellation was spun off from utility owner Exelon (EXC.US) in 2022, CEO Joseph Dominguez stated his interest in growing the company through acquisitions. The following year, Constellation acquired a 44% stake in a Nuclear Power plant from NRG Energy (NRG.US) in Texas for $1.75 billion.

However, this transaction pales in comparison to the acquisition of Calpine, both in scale and value. Constellation operates gas and hydroelectric facilities, as well as the largest Nuclear Power units in the USA, with a total capacity of 32.4GW. One GW is equivalent to a traditional Nuclear Power plant, sufficient to power over 0.85 million average American homes. Through the Calpine deal, it will add 78 power plants across 22 states, generating 27GW.

According to Friday's statement, Constellation paid a price that is 7.9 times the expected earnings for 2026.

Editor/lambor