2025-10-27 12:30Transaction Overview - American Water and Essential Utilities will merge in a tax-free, all-stock transaction[16] - The combined company will have a market capitalization of $40 billion and an enterprise value of $63 billion[16] - The fixed exchange ratio is 0305 American Water shares for each Essential Utilities share[16] - American Water shareholders will own 69% and Essential Utilities shareholders will own 31% of the combined company[16] - The merger is targeted to close by the end of Q1 2027[16] Financial and Growth Outlook - The merger is expected to result in EPS growth of 7%-9% and DPS growth of 7%-9%[16] - The combined company targets rate base growth of 8%-9%, including acquisitions[26] - The combined company's 5-year capital investment plan is $28 billion[42] Combined Company Profile - The combined company will serve 54 million U S connections[29] - The combined company's 2024A rate base is $34 billion, expected to reach $41 billion by 2026E[29] - The combined company will operate across 17 regulated states[29] - Pennsylvania will account for 28% of the combined company's water & wastewater total rate base[33] Strategic Benefits - The merger will create a top 10 large-cap pure-play utility[24] - The merger will solidify the company's position as a premier partner-of-choice water utility for municipal providers[25] - The merger will enhance financial strength and expand the low-risk foundation[50]