The company generates electricity for 27 million homes annually. Credit: Kiri Photography/Shutterstock.

Constellation Energy is in advanced discussions to purchase Calpine, as reported by Bloomberg.

The Baltimore-based energy company is negotiating with Calpine’s private equity owners to finalise terms that could place Calpine’s valuation at $30bn inclusive of debt.

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A formal announcement regarding the deal could be made in January or February 2024.

Energy Capital Partners, CPP Investments and Access Industries took Calpine private in a transaction exceeding $17bn, debt included, in 2017.

Calpine, established in the 1980s, operates 80 facilities throughout 22 states in the US and Canada.

The company’s operations, which focus on natural gas and geothermal energy, are instrumental in generating electricity for 27 million homes annually.

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Constellation Energy perceives the acquisition of Calpine as a strategic opportunity to bolster its power generation capacity in response to the escalating demand for electricity.

Discussions between the companies commenced in recent months, with the potential cash-and-stock deal expected to significantly enhance Constellation’s earnings per share.

The acquisition would diversify Constellation’s portfolio of plants in terms of geographic spread and energy sources, given Calpine’s substantial investment in natural gas.

While Constellation is actively considering the acquisition, the deal’s completion is not guaranteed and may still encounter delays or fall through.

Sources requesting anonymity due to the sensitivity of the information have indicated that the deal’s final value is subject to change.