Constellation reaches agreement with US Department of Justice for acquisition of Calpine

Dec 5 (Reuters) - U.S. power company Constellation Energy CEG.O said on Friday it has reached a resolution with the U.S. Department of Justice on the conditions required to complete the previously announced $16.4 billion acquisition of Calpine Corporation.

The Federal Energy Regulatory Commission also approved the deal, on the condition Calpine divests four of its generating assets in the Mid-Atlantic region.

The deal, announced in January, is one of the biggest acquisitions in U.S. power industry, coming at a time of rising electricity demand, driven by the proliferation of energy-hungry AI data centers and the electrification of transportation and buildings.

In July, Constellation had received a regulatory approval from FERC following earlier approvals by the New York Public Service Commission and the Public Utility Commission of Texas for the acquisition.

As part of the agreement, Constellation will divest three natural gas-fired power plants - its York 2 plant in Pennsylvania, the Jack Fusco Energy Center near Houston, Texas, and a minority interest in the Gregory Power Plant near Corpus Christi, Texas.

The DOJ said in a statement the divestitures address concerns the acquisition could harm competition and increase prices for consumers in the Electric Reliability of Texas and PJM Interconnection grids.