Camden-based American Water Works Company, Inc. and Bryn Mawr-based Essential Utilities, Inc., the two largest municipal water and sewage system companies in the U.S. with roots dating back to the 1800s, have agreed to combine in an all-stock, tax-free merger.
Aqua Pennsylvania, a subsidiary of Essential Utilities, is the water provider for Glenside and serves both Cheltenham and Abington townships.
According to a press release, their combined enterprise value is approximately $63 billion, based on closing stock prices as of October 24. 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. Upon completion of the merger, American Water shareholders will own approximately 69% and Essential shareholders will own approximately 31% of the combined company.
“This combination brings together two industry leaders united by our shared mission to provide safe, clean, reliable and affordable water and wastewater services to our customers,” American Water President and Chief Executive Officer, John C. Griffith said. “By joining forces with Essential, the combined company’s enhanced scale and operational efficiency will support continued investment in our critical infrastructure, enabling us to continue providing superior customer service at affordable rates. We look forward to bringing together the talented teams of both companies to help solve the many water and wastewater challenges across the country and expand our customer base.”
The Philadelphia Inquirer wrote that the two companies’ CEOs said the merger would be able to more easily service AI and high-speed data centers which are expected to proliferate in Pennsylvania in the years to come. Governor Josh Shapiro has taken a pro-data center position and in June heralded a $20 billion investment from Amazon that would bring data centers to communities across the state, with Luzerne and Bucks counties being the first sites.
“Essential has committed to investing $26 million to supply 18 million gallons a day to International Electric Power’s 1,400-acre data center and nearly 1,000-megawatt natural gas and battery storage plant, which sit on former coal-mining lands in western Pennsylvania’s Greene County,” The Inquirer wrote.
The transaction is expected to close by the end of the first quarter of 2027, subject to approval from each company’s shareholders, clearance under the Hart-Scott-Rodino Act, and regulatory approvals, including approval from the applicable public utility commissions.
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Photo: American Water