(Bloomberg) -- Constellation Energy Corp., the biggest US nuclear operator, is expanding its fleet with a deal to acquire NRG Energy Inc.’s 44% stake in the South Texas Project.
The transaction is valued at $1.75 billion, with an effective purchase price of $1.4 billion after including tax benefits, Constellation Energy said in a statement Thursday. The Baltimore-based company will be one of three owners of the two-reactor plant, which has 2.65 gigawatts of capacity — enough to power two million homes.
Shares of Constellation Energy rose 4.7% to $87.95 at 10:18 a.m. in New York after hitting their highest intraday price since Dec. 28.
The deal comes as the threat of climate change boosts the value of carbon-free nuclear power. Constellation Energy has ownership interests in 13 nuclear plants with 23 reactors, and Chief Executive Officer Joe Dominguez has said that the energy source is critical for meeting US climate goals. The company expects to supply only carbon-free electricity by 2040.
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The facility’s “ability to produce resilient, carbon-free energy 24/7 makes it among the most valuable power sources in the world,” Dominguez said in the statement. The company was spun off from Exelon Corp. last year.
The transaction will be financed with a combination of cash and debt and is expected to be completed by the end of the year.
(Updates with comment from CEO in fourth paragraph.)
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