American Water and Essential Utilities, two top players in the Pennsylvania utility market, have agreed to merge into a water, wastewater and natural gas conglomerate worth $63 billion.
New Jersey-based American Water would absorb Essential in the $12 billion, all-stock transaction announced Monday, getting 69% control of the combined company to Essential’s 31%.
Essential owns Peoples Natural Gas as well as water utility Aqua.
The deal is expected to close in the first quarter of 2027, pending review from federal antitrust authorities and “applicable public utility commissions.”
That includes the Pennsylvania Public Utility Commission, which must sign off on any change in ownership of a regulated utility in the state.
Dave Hixson, a spokesman for the commission, said he was not aware of any filings on the proposed merger.
In a joint press release, Essential and American Water promised the merger won’t raise customer rates.
“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,” American Water President and CEO John Griffith said in a statement.
American Water is already the largest regulated water and wastewater utility in the country, serving about 1,700 communities in 14 states.
In Southwestern Pennsylvania, large parts of Allegheny, Butler, Fayette and Washington counties get their water or sewage through the company.
The company has a small presence in several other area counties, including Westmoreland.
Aqua would be the major prize for American Water. It provides water to more than 3 million people in eight states, including Pennsylvania — but not Southwestern Pennsylvania.
As for Peoples, the gas utility has about 705,000 customers across 18 Pennsylvania counties, including Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland. It has another 41,000 in Kentucky.
American Water plans to review “strategic alternatives for its non-water and non-wastewater businesses” if the sale closes, according to the release, suggesting Peoples may be offloaded.
The companies also said they don’t expect the deal to create any “material changes to employee compensation or benefits.”
Essential bought Peoples in 2020 for nearly $4.3 billion. To earn regulatory approval, Essential agreed to $23 million in rate credits for Peoples customers.
Since then, Peoples has doubled the value of its assets and “substantially improved its risk profile,” according to the joint release.
American Water’s headquarters in Camden, New Jersey would stay put. Essential’s home base in Bryn Mawr as well as its Pittsburgh office would “maintain a strong operational presence long term,” the companies said.
Jack Troy is a TribLive reporter covering business and health care. A Pittsburgh native, he joined the Trib in January 2024 after graduating from the University of Pittsburgh. He can be reached at
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