Description

American Water And Essential Utilities: The Mega-Utility Deal Shaking Up Investors!

American Water Works has taken a transformative step by agreeing to acquire Essential Utilities in an all-stock merger that would create the largest regulated water and wastewater utility platform in the United States. The transaction, expected to close by the end of the first quarter of 2027, would result in American Water shareholders owning approximately 69% of the combined entity, with Essential Utilities shareholders holding the remaining 31%. The pro forma company would command a rate base of roughly $34 billion as of year-end 2024 and serve approximately 5.4 million water, wastewater, and natural gas connections across 17 regulated states and 18 military installations. Importantly, management has reaffirmed long-term targets of 7%–9% EPS growth and 8%–9% rate base growth, with the transaction expected to be accretive to earnings in the first full year post-closing.