American Water And Essential Utilities Unanimously Approve An All-Stock, Tax-Free Merger. Essential Shareholders Will Receive 0.305 American Water Shares Per Essential Share And American Water Shareholders Will Hold ~69% And Essential Shareholders ~31% Of The Combined Company

On Monday, October 27, American Water announced that the boards of directors of the company and Essential Utilities, Inc. have unanimously approved a definitive agreement to combine in an all-stock, tax-free merger as the 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 at the closing of the transaction. This exchange ratio implies a premium of approximately 10% to Essential shareholders based on the average of the daily volume weighted average price of each company's common stock over the 60-trading-day period ending October 24, 2025. Upon completion of the merger, American Water shareholders will own approximately 69% and Essential shareholders will own approximately 31% of the combined company on a fully diluted basis.