Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 113

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 113
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| • |     | the exchange ratio is fixed and will not fluctuate based upon changes in the market price of Essential or                                                                                                                                     
 American Water common stock during the interim period, and therefore Essential will be exposed to any adverse development in American Water’s business, operations, financial condition, earnings, and prospects, and the value of the merger 
 consideration payable to Essential shareholders will decrease in the event that the market price of American Water common stock decreases prior to completion of the merger;                                                                  |

| • |     | the significant effort and cost involved in connection with negotiating the merger agreement and completing the                                                                                                                                                                                     
 merger (including certain costs and expenses if the merger is not completed), and the substantial time, attention, and effort of Essential management required to complete the merger and the potential further disruptions to Essential’s day-to-day operations during the pendency of the merger; |

| • |     | the restrictions under the terms of the merger agreement on the conduct of Essential’s business prior to                                                                                                                                           
 the completion of the merger, which may have a material adverse effect on Essential’s ability to respond to changing market and business conditions or delay or prevent Essential from undertaking strategic and other business opportunities that 
 might arise or certain other actions it might otherwise take or forgo from taking with respect to Essential’s operations pending completion of the merger, including in light of the expected time frame for completing the merger;                |

| • |     | the amount of time it could take to complete the regulatory approval processes, and the possible diversion of                                                                                                                           
 Essential management’s attention from Essential’s ongoing business given the substantial time and effort necessary to obtain these approvals and complete the merger and to plan for the integration of the operations of Essential and 
 American Water;                                                                                                                                                                                                                         |

| • |     | the fact that the merger agreement precludes Essential from soliciting competing proposals, imposes restrictions                                                                                                                             
 on Essential’s ability to respond to unsolicited competing proposals in certain circumstance and requires Essential to pay to American Water a termination fee of $370 million if the merger agreement is terminated and Essential accepts a 
 superior proposal, which could discourage other third parties from making an unsolicited competing proposal to acquire Essential;                                                                                                            |

| • |     | the possibility that Essential may be required to pay American Water a termination fee of $370 million under                                                                                                                         
 certain circumstances following termination of the merger agreement, including if the merger agreement is terminated due to an adverse recommendation change by the Essential board, as described in “The Merger Agreement—Effect of 
 Termination” beginning