Water Wars Just Ended: $63 Billion Mega-Merger Creates U.S. Utility Superpower

American Water Works Company AWK is set to merge with Essential Utilities WTRG in a move that could reshape the U.S. utility landscape. The all-stock, tax-free transactionapproved unanimously by both boardscreates a regulated water and wastewater powerhouse with a combined market capitalization near $40 billion and an enterprise value of roughly $63 billion. Under the terms, Essential shareholders will receive 0.305 shares of American Water for each share they own, implying about a 10% premium. Once complete, American Water shareholders will control roughly 69% of the new entity, while Essential investors will hold the remaining 31%.

The strategic rationale runs deep. American Water CEO John C. Griffith said the deal brings together two leaders with a shared mission to deliver safe, clean, and affordable water while scaling investment in critical infrastructure. Essential's CEO, Christopher H. Franklin, emphasized that the merger builds on both firms' long legacies of sustainable operations and regulatory credibility. Together, they'll serve around 4.7 million water and wastewater connections across 17 states and 18 military sites, alongside Essential's Peoples Natural Gas unit, which has nearly 750,000 customers and is expanding its rate base at double-digit rates.

Financially, the combined company is expected to sustain 79% annual growth in earnings and dividends, mirroring American Water's current targets. Management expects the transaction to be accretive to earnings in the first year, supported by operational synergies, scale efficiency, and a stronger balance sheet. With headquarters anchored in Camden, New Jersey, and leadership continuity across both organizations, the merger could produce one of the most resilient, diversified utilities in the U.S.one capable of meeting the nation's growing water and energy demands. Pending shareholder and regulatory approvals, the deal is expected to close by the end of the first quarter of 2027.