Company: AWK
Filing Date: 2025-12-29
Form Type: S-4/A
Source: 0001193125-25-332292
Chunk: 63

Company: American Water Works Company, Inc.
Filing Date: 2025-12-29
Form: S-4/A
Chunk 63
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 assurance can be given that the combined company will be able to attract, motivate, or retain
management personnel and other key employees of American Water and Essential to the same extent that American Water and Essential have previously been able to attract or retain their own employees.

The parties may be the target of securities class action and derivative lawsuits that could result in substantial costs and may delay or prevent the merger from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into a
merger agreement. Even if these lawsuits are without merit, defending against these claims can result in substantial costs to the parties to the merger agreement and divert management time and resources. Additionally, if a plaintiff is successful in
obtaining an injunction prohibiting the completion of a merger, that injunction may delay or prevent such merger from being completed.

American Water and Essential may incur substantial and/or unexpected transaction fees and merger-related costs in connection with the merger.

American
Water and Essential expect to incur substantial non-recurring expenses associated with completing the merger, as well as expenses related to combining the operations of the two companies. The combined company
may incur additional unanticipated costs in the integration of the companies’ businesses. Although the parties expect that the elimination of certain duplicative costs, as well as the realization of other efficiencies related to the
integration of the two businesses, will offset some or all of the incremental transaction and merger-related costs over time, the combined company may not achieve this net benefit in the near term, or at all.

None of the opinions regarding the fairness, from a financial point of view, of the exchange ratio in the merger delivered to the American Water board and the Essential board prior to the signing of the merger agreement reflects any changes in circumstances since the date on which such opinions were delivered.

Each of the opinions rendered by BofA Securities, financial advisor to American Water, to the American Water board on, and dated, October 24, 2025, and by
Moelis, financial advisor to Essential, to the Essential board on, and dated, October 26, 2025, were based upon information available to such financial advisors as of the date of

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each respective opinion. Neither of the opinions reflect any changes that may occur or may have occurred after the date on which that opinion was delivered, including changes to the operations
and prospects of American Water or Essential, changes in general market and economic conditions, or other changes that may be beyond the control of American Water and Essential. Any such changes may