American Water is working to close its all-stock combination with Essential Utilities, a transaction intended to create a roughly 4.7-million-connection regulated water and wastewater utility across 17 states. Shareholder approvals are already in place, HSR clearance has expired, and the companies continue to target closing by the end of the first quarter of 2027; remaining regulatory approvals are the main gating items.
The Pennsylvania process moved forward, but this is not approval. American Water, Essential and affiliates filed a joint petition for a non-unanimous settlement with Pennsylvania regulators on September 15, 2026. 〔0〕 That is a meaningful step because it converts an open-ended regulatory dispute into negotiated terms, but the lack of unanimous support means opposition has not disappeared.
The filing reduces one closing obstacle without changing the deal’s basic risk. The settlement must first go to the administrative law judges for a Recommended Decision and then to the Pennsylvania Public Utility Commission for approval. 〔1〕 The practical signal is therefore modestly favorable versus simply waiting for a contested hearing, but the outcome and any conditions remain unresolved.
Bottom line: This advances the Essential merger through an important state approval process, but it is a procedural milestone—not the regulatory green light. The deal’s Pennsylvania risk is lower than before, not gone.
Read the original 8-K on SEC EDGAR ↗