お知らせ • Oct 27
American Water Works Company, Inc. (NYSE:AWK) agreed to acquire Essential Utilities, Inc. (NYSE:WTRG) for $12.3 billion.
American Water Works Company, Inc. (NYSE:AWK) agreed to acquire Essential Utilities, Inc. (NYSE:WTRG) for $12.3 billion on October 26, 2025. Under the terms of the agreement, Essential shareholders will receive 0.305 shares of American Water for each share of Essential they own at the closing of the transaction. This exchange ratio implies a premium of approximately 10% to Essential shareholders based on the average of the daily volume weighted average price of each company’s common stock over the 60-trading-day period ending October 24, 2025. Upon completion of the merger, American Water shareholders will own approximately 69% and Essential shareholders will own approximately 31% of the combined company on a fully diluted basis. Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Essential (the “Merger”), with Essential surviving the Merger as a wholly owned subsidiary of American Water. The combine tax free merger provides a pro forma market capitalization of approximately $40 billion and a combined enterprise value of approximately $63 billion, based on closing stock prices as of October 24, 2025. The Merger Agreement provides that American Water will retain its current name, maintain its headquarters and principal corporate office in Camden, New Jersey, and maintain substantial operations in Pennsylvania. Upon termination of the Merger Agreement under specified circumstances, including a change in the recommendation of Essential’s or American Water’s Board of Directors, the termination by Essential or American Water in order to accept a superior proposal with respect to an alternative transaction, or Essential or American Water entering into a definitive agreement in respect of a competing transaction within 12 months of termination of the Merger Agreement in certain circumstances involving a potential competing transaction proposal, Essential will be required to pay American Water a cash termination fee of $370 million or American Water will be required to pay Essential a cash termination fee of approximately $840 million.
The Merger Agreement provides that, upon consummation of the Merger, American Water’s Board of Directors shall be comprised of 15 directors, including the 10 directors serving on American Water’s Board of Directors at the Effective Time and five directors selected by Essential from directors on Essential’s Board of Directors as of the date of the Merger Agreement, and following reasonable consultation with American Water. American Water’s Board Chair will continue to serve in such role following the consummation of the Merger. Upon the consummation of the Merger, John C. Griffith will continue to serve as a director and President and Chief Executive Officer of American Water, and Christopher H. Franklin, Essential’s current Chairman of the Board of Directors and Chief Executive Officer, will serve as Executive Vice Chair of American Water’s Board of Directors for a period of two years following the Effective Time. David Bowler, American Water Executive Vice President and CFO, will serve as Executive Vice President and Chief Financial Officer, and all existing executive team members of American Water who report to the CEO will continue to do so post-close. Additionally, Daniel Schuller, Essential Executive Vice President and CFO, will serve as Executive Vice President and Chief Strategy Office. Colleen Arnold, President of Essential Aqua Water, will serve as President, Regulated Operations and Michael Huwar, President of Peoples Natural Gas, will remain President and continue to lead the natural gas business.
Consummation of the Merger is subject to certain customary conditions, including, without limitation: (i) approval by American Water’s shareholders of the issuance of the shares of American Water Common Stock to be issued as Merger Consideration in the Merger; approval of the Merger Agreement by Essential’s shareholders; the authorization for listing of shares of American Water Common Stock to be issued as Merger Consideration in the Merger on the New York Stock Exchange; receipt of certain governmental approvals, including (a) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (b) the approval of certain public utility commissions, in each case on such terms and conditions that would not, individually or in the aggregate, result in a “Burdensome Effect” (as defined in the Merger Agreement); the absence of any law or judgment prohibiting the consummation of the Merger; and the effectiveness of a registration statement on Form S-4 to be filed by American Water to register the shares of American Water Common Stock to be issued as Merger Consideration in the Merger. The board of directors of American Water Works Company, Inc. and Essential Utilities, Inc. has unanimously approved the transaction. The transaction is expected to close by the end of the first quarter of 2027. The transaction is expected to be accretive to American Water’s earnings per share in the first year following close, and the combined company expects to maintain American Water’s 7-9% earnings per share and dividend growth targets post close. Subject to market conditions and board approval, the parties expect the combined company to adopt American Water’s current dividend policy and payout target range. Both companies expect to maintain their existing dividend policies until the transaction is completed.
BofA Securities is serving as exclusive financial advisor and fairness opinion provider to American Water, and Pankaj Sinha and Emily Prezioso Walsh of Skadden, Arps, Slate, Meagher & Flom LLP are serving as legal advisors. Moelis & Company LLC is serving as exclusive financial advisor to Essential, and George Stamas, Alexander Fine and Evan D’Amico of Gibson, Dunn & Crutcher LLP are serving as legal advisors. Joele Frank, Wilkinson Brimmer Katcher is serving as strategic communications advisor for both companies.
