Constellation's acquisition of Calpine to generate US$2.6bn for CPP Investments
CPP Investments has announced the sale of its entire 15.75 percent stake in US power producer Calpine Corporation (Calpine) to Constellation Energy (Constellation).
The sale forms part of Constellation's acquisition of Calpine. The transaction is expected to generate approximately US$700m in cash and US$1.9bn in Constellation stock for CPP Investments.
The investment in Calpine was made in 2018 through a co-investment with Energy Capital Partners (ECP) and Access Industries.
Bill Rogers, managing director and head of Sustainable Energies at CPP Investments, expressed satisfaction with the outcome, stating, “We are pleased by the success of our investment in Calpine and view this transaction as an excellent opportunity to realize strong returns for the CPP Fund.”
He also highlighted CPP Investments' anticipation of Constellation's growth, enhanced by the increased scale and cash flow from the combination.
The merger will expand the footprint of the combined company across the continental US.
Texas, the fastest-growing market for power demand, will see a significantly larger presence, alongside other key markets such as California, Delaware, New York, Pennsylvania, and Virginia.
Rogers described Calpine as an example of CPP Investments' strategy, stating, “Calpine serves as a good example of CPP Investments' approach to investing across the energy spectrum.”
He explained that the approach involves investing in companies critical to delivering affordable, reliable power while supporting their progress toward decarbonising their portfolios.
The transaction is expected to close in the second half of 2025, subject to customary closing conditions and approvals from regulatory agencies.
These include the Federal Energy Regulatory Commission, the Department of Justice, the New York Public Service Commission, and the Public Utility Commission of Texas, among others.
