Company: AWK
Filing Date: 2025-10-27
Form Type: 425
Source: 0001193125-25-250649
Chunk: 1

Company: American Water Works Company, Inc.
Filing Date: 2025-10-27
Form: 425
Chunk 1
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| Item 1.01. | Entry into a Material Definitive Agreement. |

Execution of Agreement and Plan of Merger with Essential Utilities, Inc. On October 26, 2025, American Water Works Company, Inc. (“American Water” or the “Company”), Alpha Merger Sub, Inc., a direct wholly owned subsidiary of the Company (“Merger Sub”), and Essential Utilities, Inc. (“Essential”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement, which has been unanimously approved by the present members of the Board of Directors of each of American Water and Essential, provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Essential (the “Merger”), with Essential surviving the Merger as a wholly owned subsidiary of American Water. Subject to the terms and conditions of the Merger Agreement, at the time at which the Merger becomes effective (the “Effective Time”), each share of common stock, par value $0.50 per share, of Essential (“Essential Common Stock”), issued and outstanding immediately prior to the Effective Time, other than any shares of Essential Common Stock owned by American Water or Merger Sub or by Essential as treasury stock (in each case, other than restricted shares), will be converted into the right to receive 0.305 shares (the “Exchange Ratio”) of validly issued, fully paid and nonassessable common stock, par value $0.01 per share, of American Water (“American Water Common Stock”) (the aggregate number of such shares of American Water Common Stock to be issued in the Merger, the “Merger Consideration”). The Merger Agreement provides for the treatment of outstanding equity awards of Essential, depending on the type of award. Under the Merger Agreement, at the Effective Time, (i) each outstanding option to acquire Essential Common Stock, whether vested or unvested, will be converted into an adjusted option to acquire a number of shares of American Water Common Stock determined by applying the Exchange Ratio to the number of shares of Essential Common Stock that may be acquired thereunder, with an adjusted exercise price determined by applying the Exchange Ratio to the exercise price of such option, and otherwise on the same terms and conditions as the original option to acquire Essential Common Stock, except that any performance-based vesting conditions will no longer apply to the adjusted option; (ii) each outstanding restricted share of Essential Common Stock will be