Massive Merger of U.S. Water Utilities Passes First Hurdle with Overwhelming Shareholder Approval

American Water Works Company, Inc. (AWK) and Essential Utilities submitted merger proposals at their respective special shareholder meetings on February 10, securing approximately 99% approval from American Water shareholders and roughly 95% approval from Essential Utilities shareholders, thereby finalizing the merger-related share issuance and approvals. Under the stock-for-stock transaction, the companies plan to consolidate into one of the largest regulated water and wastewater utilities in the United States. Subject to customary regulatory reviews—including the Hart-Scott-Rodino antitrust process and state public utility commission approvals—they aim to close the transaction by the end of the first quarter of 2027.

On February 18, American Water reported its 2025 financial results, announcing year-over-year growth in adjusted earnings per share. The company reaffirmed its 2026 guidance and its long-term targets of 7–9% annual EPS and dividend growth. American Water also disclosed recent acquisitions of several small water and wastewater systems and declared its quarterly dividend. Several brokerages have updated their ratings and price targets to reflect the merger’s progress and revised valuation.

The merger was first announced in October 2025, when the combined companies had a market capitalization of approximately $40 billion and an enterprise value of around $63 billion—one of the largest regulated utility transactions at an implied value of roughly KRW 50–80 trillion. Founded in 1886, American Water is the largest regulated water and wastewater utility in the U.S., serving more than 14 million customers across 14 states and 18 military installations. The U.S. water utility sector is characterized by aging-infrastructure replacement, regulatory-driven long-term investment, and consolidation through mergers and acquisitions among private operators.