Listen to this articleThe basics:
- American Water and Essential Utilities approved an all-stock merger valued at $40 billion
- The combined utility will be headquartered in Camden
- The merged company will serve customers across 17 states
- The transaction is expected to close by Q1 2027, pending approvals
Camden-based American Water Works Co. and Essential Utilities Inc., headquartered in Bryn Mawr, Pa., announced Oct. 27 that their boards of directors unanimously approved a definitive merger agreement.
The all-stock, tax-free transaction 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 Oct. 24, 2025, according to the announcement.
The deal is expected to close by the end of the first quarter of 2027, subject to customary conditions.
The combined company – which will be known as American Water – will be based in Camden. The announcement noted “Essential’s Bryn Mawr and Pittsburgh offices will each continue to maintain a strong operational presence long term.”
American Water President and CEO John Griffith will take on those titles with the combined company. Essential Chairman and CEO Christopher Franklin will serve as executive vice chair of the board of directors and as executive sponsor of the integration task force.
Customer base
The merged company will serve about 19.5 million people – or 4.7 million customer connections – across 17 states and on 18 military installations. The merged American Water will also have a water and wastewater rate base of approximately $29.3 billion as of the end of 2024.
Founded in 1886, American Water currently serves more than 14 million people in 14 states and on 18 military installations. The company employs 6,700 professionals. Subsidiary New Jersey American Water is the largest regulated water utility in the state, serving approximately 2.9 million people.
The nearly 140-year-old Essential operates as the Aqua and Peoples brands, serving about 5.5 million people across nine states.
On board
“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,” Griffith said in a statement. By joining forces with Essential, the combined company’s enhanced scale and operational efficiency will support continued investment in our critical infrastructure, enabling us to continue providing superior customer service at affordable rates.”
Griffith added the move will bring together two “talented teams … to help solve the many water and wastewater challenges across the country and expand our customer base.”
Franklin said, “Together, we will have expertise, financial strength and regulatory credibility to continuously improve our infrastructure and meet the evolving needs of our customers.”
Other key positions
Leadership of the merged company will include:
- David Bowler, American Water executive vice president and chief financial officer, will serve as executive vice president and CFO.
- Daniel Schuller, Essential executive vice president and CFO, will serve as executive vice president and chief strategy officer
- Colleen Arnold, president of Essential Aqua Water, will serve as president, Regulated Operations
- Michael Huwar, president of Peoples Natural Gas, will remain president and continue to lead the natural gas business.
- All executive team members of American Water who report to the CEO will continue to do so post-close.
- The combined company’s 15-member board will include the 10 directors currently serving on American Water’s board and five directors designated by Essential. Karl Kurz, independent chair of the American Water board, will continue to serve in that role after the closing of the transaction.
Advisors
BofA Securities is serving as exclusive financial advisor to American Water, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor.
Moelis & Co. LLC is serving as exclusive financial advisor to Essential, and Gibson, Dunn & Crutcher LLP is providing counsel.
Joele Frank, Wilkinson Brimmer Katcher is serving as strategic communications advisor for both companies.