Company: AWK
Filing Date: 2025-12-29
Form Type: S-4/A
Source: 0001193125-25-332292
Chunk: 405

Company: American Water Works Company, Inc.
Filing Date: 2025-12-29
Form: S-4/A
Chunk 405
---
 “Agreement”), among American Water, Alpha Merger Sub, Inc., a wholly owned subsidiary of American Water (“Merger Sub”), and Essential Utilities, Inc. (“Essential”), pursuant to which, among other things, Merger Sub will merge with and into Essential (the “Transaction”) and each share of the common stock, par value $0.50 per share, of Essential issued and outstanding (“Essential Common Stock”) will be converted into the right to receive 0.305 (the “Exchange Ratio”) shares of the common stock, par value $0.01 per share, of American Water (“American Water Common Stock”). The terms and conditions of the Transaction are more fully set forth in the Agreement. You have requested our opinion as to the fairness, from a financial point of view, to American Water of the Exchange Ratio provided for in the Transaction. In connection with this opinion, we have, among other things:

| (1) | reviewed certain publicly available business and financial information relating to Essential and American 
 Water;                                                                                                    |

| (2) | reviewed certain internal financial and operating information with respect to the business, operations and                                                                                                                                
 prospects of Essential furnished to or discussed with us by the management of Essential, including certain financial forecasts relating to Essential prepared by the management of Essential (such forecasts, the “Essential Forecasts”); |

| (3) | reviewed certain internal financial and operating information with respect to the business, operations and                                                                                                                                      
 prospects of American Water furnished to or discussed with us by the management of American Water, including certain financial forecasts relating to American Water prepared by the management of American Water (such forecasts, the “American 
 Water Forecasts”);                                                                                                                                                                                                                              |

| (4) | reviewed and discussed with members of senior management of American Water estimates of the amount and                                       
 utilization of certain net operating losses and other tax attributes of Essential prepared by the management of American Water (the “NOLs”); |

| (5) | reviewed certain estimates as to the impact of incremental rate base investment and the amount and timing of                                   
 temporary cost efficiencies (collectively, the “Efficiencies”) anticipated by the management of American Water to result from the Transaction; |

| (6) | discussed the past and current business, operations, financial condition and prospects of Essential with                                                                                                                         
 members of senior managements of Essential and American Water, and discussed the past and current business, operations, financial condition and prospects of American Water with members of senior management of American Water; |

| (