American Water Works AWK announced that it has completed the acquisition of water and wastewater systems across eight states from Nexus Regulated Utilities, LLC, a unit of Nexus Water Group, Inc., for about $315 million. The acquisition expands AWK’s existing customer base by adding about 47,000 new customers. The company took more than a year to close the deal, which was announced on May 19, 2025.
American Water Works continues to expand its operation through systematic acquisition and merger. This enables the company to expand its existing customer base and boost long-term earnings growth. The company completed 18 water and wastewater acquisitions in 2025, adding 20,900 customers. The pending 22 acquisitions (as of April 15, 2026), when completed, will add another 58,400 customers to its customer base.
AWK has been actively investing in upgrading, expanding and maintaining its widespread water and wastewater infrastructure network. The company plans to invest $3.7 billion in 2026 and $46-$48 billion between 2026 and 2035. This investment will strengthen and expand the company’s infrastructure, improve service reliability and support long-term growth.
Consolidation Strengthens Fragmented Water Industry
The U.S. water industry operates in a highly fragmented manner, with more than 50,000 community water systems and nearly 14,000 wastewater treatment systems. A significant portion of the water and wastewater infrastructure is aging, and regular investment is required for maintenance or replacement. Many smaller utilities lack financial ability and are unable to make the required investment for infrastructure development and maintenance, leading to water loss and poor service to customers.
Consolidation through mergers and acquisitions plays a vital role in infrastructure development, which enhances operational efficiency and improves service quality. As a result, larger utilities expand their footprint through acquiring smaller utilities, supporting service reliability, system upgradation and modernization.
California Water Service Group CWT announced that it has agreed to acquire Nexus Water Group’s Nevada and Oregon water and wastewater systems for $218 million. The transaction is expected to be closed by the end of 2026. The company plans to invest $627 million and $677 million in 2026 and 2027, respectively, for infrastructure development and to support long-term operational growth.
Essential Utilities, Inc. WTRG stated that its unit Aqua Pennsylvania has completed the acquisition of the Greenville Municipal Water Authority in Mercer County, PA, for $18 million, expanding its customer base by adding over 2,900 new customers. The company has invested $269 million in the first quarter of 2026 and aims to invest $1.7 billion in 2026 for infrastructure development. The company is also working on a merger agreement with American Water Works. The transaction is expected to close in first-quarter 2027 and will result in the formation of a $40 billion utility company.
Middlesex Water Company MSEX stated that its unit, Tidewater Utilities, Inc., has completed the acquisition of Pinewood Acres, LLC, water utility assets in Delaware, adding about 360 new customers to its service network. The company invested $21 million in the first quarter of 2026 and plans to invest $506 million in 2026 -2028, which includes $249 million for infrastructure expansion, upgradation and replacement.
Price Movement of AWK
In the past month, shares of the company have plunged 4.5% compared with the industry’s 8.1% decline.
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AWK’s Zacks Rank
AWK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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American Water Works Company, Inc. (AWK): Free Stock Analysis Report
California Water Service Group (CWT): Free Stock Analysis Report
Middlesex Water Company (MSEX): Free Stock Analysis Report
Essential Utilities Inc. (WTRG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).