American Water Works Company, Inc. (NYSE: AWK) and Essential Utilities, Inc. (NYSE: WTRG) today announced that both companies’ boards of directors have unanimously approved a definitive all-stock, tax-free merger that will unite two of the nation’s premier regulated water and wastewater utilities.

The combination will create a company with a pro forma market capitalization of approximately $40 billion and a combined enterprise value of roughly $63 billion, based on closing stock prices as of October 24, 2025. Together, the merged company will serve 4.7 million water and wastewater connections across 17 states, with a combined regulated rate base of approximately $29.3 billion.

Under the terms of the agreement, Essential shareholders will receive 0.305 shares of American Water common stock for each Essential share held at closing. This represents a 10 percent premium to Essential shareholders based on the 60-day volume-weighted average price of each company’s stock through October 24, 2025. Upon completion of the merger, American Water shareholders will own approximately 69 percent of the combined company, and Essential shareholders will own approximately 31 percent, on a fully diluted basis.

The combined company will operate as a leading regulated U.S. utility focused exclusively on providing safe, clean, reliable, and affordable water and wastewater services. The merger enhances scale, geographic diversity, and customer-centric capabilities, positioning the organization to deliver best-in-class service and sustainable growth. “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,” said John C. Griffith, President and Chief Executive Officer of American Water. “By joining forces with Essential, our enhanced scale and operational efficiency will support continued investment in critical infrastructure, enabling us to provide superior customer service at affordable rates. We look forward to bringing together the talented teams of both companies to help address the many water and wastewater challenges across the country.”

Christopher H. Franklin, Chairman and Chief Executive Officer of Essential Utilities, added, “Throughout Essential’s nearly 140-year history, we have led with purpose to shape a future rooted in sustainability, innovation, and best-in-class service. The combined company will build upon our track record of reliability and be better positioned to solve today’s challenges while creating a sustainable future. Together, we will have the expertise, financial strength, and regulatory credibility to continuously improve infrastructure and meet the evolving needs of our customers.”

American Water expects the transaction to be accretive to earnings per share in the first full year after closing and to support its long-term EPS and dividend-per-share growth targets of 7 to 9 percent. The company also expects to maintain its long-term rate-base growth target of 8 to 9 percent, reflecting continued investment in infrastructure renewal, resiliency, and technology.

The merger will combine complementary operating territories, creating a broader and more diversified customer base while maintaining strong regulatory relationships nationwide. The combined entity will also continue to honor all existing union contracts, employee compensation, and benefits, with expanded long-term career opportunities for both workforces.

There will be no customer rate changes as a result of the merger. Both companies will continue their long-standing commitment to water affordability, community engagement, and charitable giving across more than 2,000 communities.The combined company is expected to maintain a strong investment-grade balance sheet and improved credit metrics, supported by a larger customer base and diversified regulatory exposure. The transaction will be completed without new debt financing, as it is structured as an all-stock merger.

The deal also includes Essential’s Peoples Natural Gas subsidiary, which provides regulated natural-gas service to roughly 746,000 customers in western Pennsylvania and Kentucky. Peoples has doubled its rate base since 2019 and continues to grow at over 10 percent annually, offering additional long-term optionality and diversification for the combined company. 

The merged company will operate under the American Water Works Company, Inc. name and continue to trade on the New York Stock Exchange under the ticker symbol “AWK.” The transaction is expected to close in mid-2026, subject to approval by shareholders of both companies, customary regulatory reviews, and other closing conditions. 

About American Water Works Company, Inc.

Founded in 1886, American Water Works Company, Inc. (NYSE: AWK) is the largest publicly traded U.S. water and wastewater utility company, providing essential services to more than 14 million people in 24 states. Headquartered in Camden, New Jersey, American Water is dedicated to delivering safe, clean, reliable, and affordable water services through operational excellence and responsible stewardship.

About Essential Utilities, Inc.

Essential Utilities, Inc. (NYSE: WTRG) serves approximately 5 million customers across the United States through its regulated water, wastewater, and natural-gas operations. Headquartered in Bryn Mawr, Pennsylvania, Essential Utilities is committed to sustainable infrastructure investment and long-term community value creation.