Company: AWK
Filing Date: 2025-10-27
Form Type: 425
Source: 0001193125-25-250758
Chunk: 1

Company: American Water Works Company, Inc.
Filing Date: 2025-10-27
Form: 425
Chunk 1
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 Essential Utilities to Combine as a Leading Regulated U.S. Water and Wastewater Utility Increases Scale, Geographic Diversity and Customer-Centric Capabilities to Deliver Best-in-Class Service to Existing and Future Customers

American Water & Essential Utilities Enter Next Phase of Growth American Water (NYSE: AWK) and Essential Utilities (NYSE: WTRG) are combining as a leading regulated U.S. water and wastewater public utility, with a shared mission to provide safe, clean, reliable and affordable services to customers. American Water & Essential Utilities are Better Together Benefits all stakeholders Combined company better positioned to help solve water and wastewater challenges, while continuing to safely and reliably support customers and communities, creating opportunities for employees and delivering value for shareholders. Stakeholder Benefits ->

Bolsters significant regulated water and wastewater utility providers The combined company would have a water and wastewater rate base of approximately $29.3 billion1 as of the end of 2024. 1 Excludes gas rate base of $4.2bn and includes Net Utility Plant not yet included in rate base, pending rate case filings/outcomes. Delivers attractive, long-term capital investment profile American Water expects to maintain its long-term rate base growth target of 8-9% upon the closing of the merger, positioning the company to continue to provide high quality service to customers. Supports long-term EPS and DPS growth of 7-9% for combined company The combined company expects to maintain American Water’s 7-9% earnings per share and dividend growth targets post close. Subject to market conditions and board approval, the parties expect the combined company to adopt American Water’s current dividend policy and payout target range.

Includes an industry leading natural gas (LDC) utility that provides optionality to the combined company Peoples Natural Gas is growing its rate base at a rate >10% annually. In the five years since Essential has owned it, Peoples has doubled its rate base and substantially improved its risk profile. The Peoples regulated subsidiaries provided natural gas services to ~705,000 customers in western Pennsylvania and an additional ~41,000 in Kentucky as of the end of 2024.

Creating a Multi-State Utility Platform with Compelling Stakeholder Benefits Download Stakeholder Infographic BENEFITS FOR Customers and Communities There will be no change in customer rates as a result of the merger, and American Water and Essential will be better able to maintain an average customer water bill that is affordable © Customers will benefit from the combined best practices, knowledge and skills of both utilities © Expanded set of resources to help solve water and wastewater