Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 110

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 110
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24, 2025, 
 an approximately 10% premium based on the average of the daily volume weighted average closing price per share of each company’s common stock over the 60-trading day period ending on that date;                                                   |

| • |     | the expectation that the use of all-stock consideration will help support                                                                                                                                                                   
 a reasonable leverage ratio for the combined company, with an estimated debt-to-consolidated capitalization ratio (as calculated for purposes of American Water’s revolving credit facility) of 0.537 to 1.000 by the second year following 
 completion of the merger, allowing the combined company to pursue additional value enhancing opportunities as appropriate;                                                                                                                  |

| • |     | the belief that Essential and American Water share similar cultures and strategic objectives and that the                   
 combined company would continue to focus on safety and be well-positioned to improve safety through technological advances; |

| • |     | the fact that 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, which the Essential board believed was consistent with market practice for transactions of this type and with the strategic purpose of the transaction, and therefore the value of 
 the merger consideration to be received by the Essential shareholders will increase in the event that the share price of American Water common stock increases prior to the completion of the merger;                                                  |

| • |     | the increase in the merger consideration that Essential was able to negotiate and the Essential board’s            
 conclusion that the merger consideration reflected the best value that American Water would be willing to provide; |

| • |     | the Essential board’s knowledge, familiarity, and understanding with Essential’s business, results of                                                                                                                                         
 operations, financial and market position, prospects and expectations concerning the operating environment and Essential’s future earnings and prospects on a standalone basis, including Essential’s standalone strategic plan and the risks 
 and uncertainties associated with such plan, including the                                                                                                                                                                                    |

71

| forecasts described in “The Merger—Certain Unaudited Prospective Financial Information” beginning on page 75, which include inherent risks and uncertainties and may 
 not be achieved;                                                                                                                                                     |

| • |     | the understanding of the Essential board of the current and prospective environment in which Essential and                                                                                                                                          
 American Water operate, including economic conditions, tariffs, the competitive landscape in the utility industry, the current and prospective regulatory environment, and the challenges facing Essential as an independent company, including the 
 difficulty Essential and the industry has had, and risks