Constellation Settles With US on $16.4 Billion Calpine Deal
(Bloomberg) -- Constellation Energy Corp. reached a settlement with the US Justice Department to complete its $16.4 billion purchase of Calpine Corp. in a deal aimed at addressing mounting concerns over soaring power prices.
The combination will create America’s biggest fleet of power plants, even after Friday’s deal that calls for the companies to divest two sites and a minority stake in one more. The settlement, if approved by the courts, would resolve a civil antitrust lawsuit seeking to maintain competition, and is in addition to four other plants the companies agreed to divest in July under a separate agreement.
Constellation is expanding its fleet to meet surging US demand for electricity. Manufacturers, homes and especially data centers are all clamoring for more power, but that’s also driving up prices. Soaring utility bills have become a major political issue, and were a key factor in the November elections that led to strong results for Democratic candidates. US regulators said the divestments were a response to concerns the combined companies would be able to manipulate power supplies to boost profits.
“The price of electricity is a pocketbook issue to American consumers working hard to afford their monthly utility bills,” Abigail Slater an assistant attorney general with the Justice Department, said in a statement. “When it comes to their electricity bills, Americans deserve the benefit of robust competition among electricity generators.”
Constellation, the biggest US owner of nuclear plants, agreed in January to acquire closely held Calpine, which owns the country’s most extensive fleet of gas plants. The companies expect the deal to close before the end of the year.
Constellation slipped 2.4% at the close in New York to $359.82.
Under the DOJ settlement, the companies will divest two natural gas plants, York 2 in Pennsylvania and Jack Fusco in Texas, as well as a minority stake in the Gregory facility in Texas.
In July, the companies offered to divest four of Calpine’s power plants in Pennsylvania and Delaware as part of a separate agreement with the Federal Energy Regulatory Commission.
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