Fiserv earnings missed by $0.61, revenue fell short of estimates
Investing.com -- American Water Works Company (NYSE:AWK) stock fell 3.2% on Monday following the announcement of an all-stock merger with Essential Utilities (NYSE:WTRG), which saw its shares drop 1%.
The companies revealed plans to combine in a tax-free merger that would create a leading regulated U.S. water and wastewater public utility with a pro forma market capitalization of approximately $40 billion and a combined enterprise value of approximately $63 billion, based on closing stock prices as of October 24, 2025.
Under the terms of the agreement, Essential shareholders will receive 0.305 shares of American Water for each share of Essential they own, representing a premium of approximately 10% based on the 60-day volume weighted average price ending October 24, 2025. Upon completion, American Water shareholders will own approximately 69% of the combined company, with Essential shareholders owning the remaining 31%.
The merger would create a utility with a water and wastewater rate base of approximately $29.3 billion as of the end of 2024, serving approximately 4.7 million connections across 17 states and 18 military installations. The transaction is expected to be accretive to American Water’s earnings per share in the first year following close.
John C. Griffith, American Water’s President and CEO, will lead the combined company, while Essential’s Chairman and CEO Christopher H. Franklin will serve as Executive Vice Chair of the board of directors and executive sponsor of the integration task force.
The companies expect to maintain American Water’s 7-9% earnings per share and dividend growth targets following the close, which is anticipated by the end of the first quarter of 2027, subject to shareholder and regulatory approvals.
The combined company will be headquartered in Camden, New Jersey, while maintaining operational presence in Essential’s Bryn Mawr and Pittsburgh offices.
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