The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Robert Cyran

NEW YORK, Jan 10 (Reuters Breakingviews) - The biggest US nuclear power producer agreed to buy gas-fueled rival Calpine for $27 bln to help feed insatiable high-tech demand. Optimistic projections have wrong-footed electricity providers before. In this case, though, the price is cheap and hedged by paying in stock.

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CONTEXT NEWS

Constellation Energy said on Jan. 10 it had agreed to buy Calpine for $16.4 billion of stock and cash and assume $12.7 billion of net debt as part of a deal that would combine two of the biggest U.S. power producers. After considering the cash to be generated between now and the transaction’s closing date, the total price will be $26.6 billion.

Calpine, which focuses on electricity powered by natural gas, is owned by Energy Capital Partners, Access Industries and Canada Pension Plan Investment Board, which together bought the company in 2017 for $17 billion, including debt.

Constellation, the biggest U.S. nuclear power producer, was formed in 2022, after it was spun out of Exelon.

(Editing by Jeffrey Goldfarb and Pranav Kiran)

((For previous columns by the author, Reuters customers can click on CYRAN/robert.cyran@thomsonreuters.com))