• CEG set to pay mostly in stock, absorb $12 bln Calpine debt
• Deal talks advanced, could come as soon as Monday
• Would be largest U.S. power M&A deal since 2007
• Calpine gas plants complement CEG's current nuclear-heavy fleet

Jan 8 (Reuters) - Constellation Energy (CEG.O) , opens new tab is nearing a roughly $30 billion deal to acquire power producer Calpine, people familiar with the matter said on Wednesday, a move that would significantly expand Constellation's generation assets at a time of rising U.S. power demand.

The transaction could be announced as early as Monday, said the people. Constellation is expected to pay mostly stock, with a small cash component, said one, adding the purchase price would include around $12 billion of Calpine debt which the buyer will absorb.

The deliberations are ongoing, the sources said, cautioning that while the talks are advanced, a deal is not guaranteed.

Constellation and Calpine did not respond to comment requests.

Shares of Constellation, which have more than doubled over the past year, closed down 4.6% on Wednesday, following news of talks with Calpine. The company has a market value of around $76 billion.

Reuters was first to report in May that the private equity owners of Calpine were considering various options, including a sale of the company, at a valuation of about $30 billion, including debt.

If the talks are successful, a takeover of Calpine would rank as the biggest in the U.S. power industry since TXU Corp's $45 billion leveraged buyout in 2007.

For Constellation, a successful acquisition would add significant gas-fired power generation to its existing mix, which is around 60% nuclear and also includes some gas, renewables and oil, according to its website.

It would also broaden Constellation's geographic footprint outside of its traditional focus areas of the northeast and Midwest: Calpine has a dozen power plants in Texas, as well as numerous generation assets on the West Coast.

The news comes as the boom in artificial intelligence and data centers is driving power demand higher, making generation assets increasingly attractive to buyers. For investors with long-standing bets on the power industry, the backdrop is allowing them to exit profitably.

Calpine was taken private in 2017 by buyout firm Energy Capital Partners, Canadian pension fund CPP Investments and Access Industries for a total of $17 billion, including debt.

Both Constellation and Calpine are independent power producers and, unlike regulated utilities, can sell power at market prices, allowing them to profit more when demand rises.

U.S. power demand is forecast to hit a record this year, building on an expectation of record demand in 2024, according to the U.S. Energy Information Administration. A government-backed report last month said power demand from data centers was expected to triple in the next three years, and consume as much as 12% of the country's electricity.

Bloomberg reported on Constellation's talks with Calpine earlier on Wednesday.

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https://www.reuters.com/business/energy/constellation-nearing-30-bln-deal-calpine-corp-bloomberg-news-reports-2025-01-08/