LS Power Buys Constellation PJM Assets for $5 Billion

In a significant move reshaping the PJM power market, LS Power has agreed to acquire a substantial portfolio of generation assets from Constellation Energy Corporation for approximately $5 billion. This transaction is a crucial component of Constellation's efforts to satisfy regulatory conditions stemming from its earlier acquisition of Calpine. The deal, which includes roughly 4.4 gigawatts of predominantly natural gas-fired capacity across Delaware and Pennsylvania, marks the largest divestiture required by antitrust regulators.

The acquired facilities, including the Bethlehem, York 1, York 2, Hay Road, and Edge Moor plants, represent a strategic expansion for LS Power within the PJM Interconnection, a region experiencing escalating electricity demand. This acquisition underscores LS Power's long-standing expertise in developing, operating, and investing in critical energy infrastructure. The company's CEO, Paul Segal, highlighted the importance of these efficient, dispatchable gas generation assets for grid reliability, emphasizing LS Power's readiness to integrate the new facilities and their workforce.

This large-scale divestiture addresses antitrust concerns raised by both the U.S. Department of Justice (DOJ) and the Federal Energy Regulatory Commission (FERC). The DOJ's resolution, finalized in December 2025, mandated the sale of these specific assets to maintain competitive balance in the PJM market. Constellation's acquisition of Calpine, which closed in January 2026, created the world's largest private-sector power producer, and this asset sale is a key step in finalizing that integration. Constellation anticipates completing remaining DOJ requirements later this year.

The transaction's valuation of approximately $1,142 per kilowatt reflects the strategic importance and operational efficiency of the acquired generation fleet. For LS Power, this deal reinforces its position as a major player in the North American power sector, complementing its existing development pipeline of new baseload generation projects. The company's extensive experience in managing complex energy infrastructure projects is expected to facilitate a smooth transition for the newly acquired assets.

Constellation, a Fortune 200 company and the nation's largest producer of clean and reliable energy, is streamlining its portfolio to meet regulatory obligations. The company's diverse fleet, spanning nuclear, natural gas, and renewables, generates enough power for approximately 27 million homes. This strategic divestiture allows Constellation to move forward with its expanded operations following the Calpine merger, while ensuring the continued reliable operation of the divested assets under new ownership.

Financial advisory for LS Power was provided by Santander, with legal counsel from White & Case LLP and Willkie Farr & Gallagher LLP. Constellation was advised by Barclays, SMBC/Jefferies as M&A advisors, and Kirkland & Ellis as legal counsel. The closing of the transaction is contingent on customary regulatory approvals from the DOJ and FERC, among other conditions.