Filed by Essential Utilities, Inc.
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-6(b)
under the Securities Exchange Act of 1934
Subject Company: Essential Utilities, Inc.
Commission File No.: 001-06659
Date: May 29, 2026
TO: All Essential Employees
FROM: Chris Franklin
SUBJECT: Integration Planning Update – Inquirer Changemaker
Spotlight & Town Hall
Colleagues,
As integration planning efforts move forward, I wanted to share this
morning’s Philadelphia Inquirer’s Changemaker Spotlight highlighting our merger with American Water, as well as our plans
for an upcoming integration town hall.
Philadelphia Inquirer Changemaker Spotlight
Earlier today, the Philadelphia Inquirer published their online Changemaker
Spotlight on our upcoming merger with American Water. (The spotlight will run in print on Sunday.) This spotlight not only highlights
the benefits that we expect many of our customers will see as part of the merger, but it also speaks to the ongoing infrastructure challenges
the water industry is facing and why John Griffith and I are so invested in the future of our company. The legacy and values of both Essential
and American Water continue to drive us forward in delivering affordable, safe, clean and reliable gas, water, and wastewater for our
customers.
Please take a few minutes to read the full spotlight here: https://www.inquirer.com/philly-first/changemaker-spotlight/american-water-essential-utilities-20260529.html
Upcoming Integration Town Hall
I’m also pleased to share that we will be holding an integration
town hall next week. Additional details on the date and time will be shared on Monday.
During this town hall we’ll announce the next level of the post-closing
management team. We’ll also discuss the expected schedule and anticipated announcements about next levels. We’ll also leave
some time for live questions.
Thank you for your continued patience and support of our upcoming merger.
Best,
Chris
Cautionary Statement Regarding Forward-Looking Statements
Certain statements included in this communication are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act
of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can
be identified by words with prospective meanings such as
“intend,” “plan,” “estimate,” “believe,” “anticipate,” “expect,” “predict,” “project,” “propose,” “assume,” “forecast,” “outlook,” “future,” “likely,” “pending,” “goal,” “objective,” “potential,” “continue,” “seek
to,” “may,” “can,” “will,” “should” and “could,” or
the negative of such terms or other variations or similar expressions. Forward-looking statements may relate to, among other things:
statements about the benefits of the proposed merger, including future financial and operating results; the
parties’ respective plans, objectives, expectations and intentions; the expected timing and likelihood of completion of
the merger and related transactions; the results of any strategic review; expected synergies of the proposed merger; the timing and
result of various regulatory proceedings related to the proposed merger, and other general rate cases, filings for infrastructure
surcharges and other governmental agency authorizations and proceedings, and filings to address regulatory lag; the combined
company’s ability to execute its current and long-term business, operational, capital expenditures and growth plans and
strategies; the amount, allocation and timing of projected capital expenditures and related funding requirements; the future impacts
of increased or increasing transaction and financing costs associated with the proposed merger or otherwise, as well as inflation
and interest rates; each party’s ability to finance current and projected operations, capital expenditure needs and growth
initiatives by accessing the debt and equity capital markets and sources of short-term liquidity; impacts of the proposed merger on
the future settlement or settlements of a party’s forward sale agreements, including potential adjustments to the forward sale
price or other economic terms thereunder, and the amount of and the intended use of net proceeds from any such future settlement or
settlements; the outcome and impact on other governmental and regulatory investigations; the filing of class action lawsuits
and other litigation and legal proceedings related to the proposed merger; the ability to complete, and the timing and efficacy of,
the design, development, implementation and improvement of technology and other strategic initiatives; each party’s ability to
comply with new and changing environmental regulations; regulatory, legislative, tax policy or legal developments; and impacts
that future significant tax legislation may have on each such party and on its business, results of operations, cash flows and
liquidity.
These forward-looking statements are predictions based on currently
available information, the parties’ current respective expectations and assumptions regarding future events that
American Water Works Company, Inc. (“American Water”) and Essential Utilities, Inc. (“Essential Utilities”)
believe to be reasonable. They are not, however, guarantees or assurances of any outcomes, performance or achievements, and readers
are cautioned not to place undue reliance upon them. You should not regard any forward-looking statement as a representation or warranty
by American Water, Essential Utilities or any other person that the expectation, plan or objective expressed
in such forward-looking statement will be successfully achieved in any specified time frame, or at all. The forward-looking
statements are subject to a number of estimates and assumptions, and known and unknown risks, uncertainties and
other factors. Actual results may differ materially from those discussed in the forward-looking statements included in this communication
as a result of the factors discussed in American Water’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed
with the Securities and Exchange Commission (the “SEC”) on February 18, 2026 (available at: ir.amwater.com), Essential
Utilities’ Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 26, 2026 (available
at: essential.co), and each party’s other filings with the SEC, and additional risks and uncertainties, including with respect to
(1) the parties’ ability to consummate the proposed merger pursuant to the terms of the definitive merger agreement or at
all; (2) each party’s requirement to obtain required governmental and regulatory approvals required for the proposed merger (and/or
that such approvals may result in the imposition of burdensome or commercially undesirable conditions, including required dispositions,
that could adversely affect the combined company or the expected benefits of the proposed merger); (3) an event, change or other circumstance
that could give rise to the termination of the merger agreement; (4) the failure to satisfy or waive a condition to closing of the proposed
merger on a timely basis or at all; (5) a delay in the timing to consummate the proposed merger; (6) the failure to integrate the parties’ businesses
successfully; (7) the failure to fully realize benefits, efficiencies and cost savings from the proposed merger or that such benefits,
efficiencies and cost savings may take longer to realize or be more costly to achieve than expected; (8) negative or adverse impacts of
the announcement of the proposed merger on the market price of American Water’s or Essential Utilities’ common stock;
(9) the risk of litigation, legal proceedings or other challenges related to the proposed merger; (10) disruption from the proposed merger
making it more difficult to maintain relationships with customers, employees, contractors, suppliers, regulators, vendors, elected officials,
governmental agencies, or other stakeholders; (11) the diversion of each party’s management’s time and attention from ongoing
business operations and opportunities of such party on merger-related matters; (12) the challenging macroeconomic environment, including
disruptions in the water and wastewater utility industries; (13) the ability of each party to manage its respective existing operations
and financing arrangements on favorable terms or at all, including with respect to future capital expenditures and investments, operations,
and maintenance costs; (14) changes in environmental laws and regulations regarding each party’s respective operations that may
adversely impact such party’s businesses or increase the cost of operations; (15) changes in each party’s key management and
personnel; (16) changes in tax laws that could adversely affect beneficial tax treatment of the proposed merger; (17) regulatory, legislative,
local or municipal actions affecting the water and wastewater industries, which could adversely affect the parties’ respective
utility subsidiaries; and (18) other economic, business and other factors, including inflation, interest rate fluctuations or tariffs.
The foregoing factors should not be construed as exhaustive.
These forward-looking statements are qualified by, and should be read
together with, the risks and uncertainties set forth above and the risk factors included in American Water’s and Essential Utilities’ respective
annual and quarterly reports as filed with the SEC and in the definitive joint proxy statement/prospectus, as filed with the SEC on December
31, 2025 (available at: https://www.sec.gov/Archives/edgar/data/1410636/000119312525337598/d15683d424b3.htm), and readers should refer
to such risks, uncertainties and risk factors in evaluating such forward-looking statements. Any forward-looking statements speak
only as of the date this communication is first used or given. Neither American Water nor Essential Utilities has any obligation or intention
to update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances
or otherwise, except as otherwise required by the federal securities laws. New factors emerge from time to time, and it is
not possible for American Water or Essential Utilities to predict all such factors. Furthermore, it may not be possible to assess the
impact of any such factor on American Water’s or Essential Utilities’ businesses, viewed independently or together,
or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking
statement.
Proposed Merger
For additional information regarding the proposed
merger, please see American Water’s registration statement on Form S-4 (Registration No. 333-292182), which was declared effective
by the SEC on December 30, 2025, and the other documents that American Water or Essential Utilities has filed or may
file with the SEC.
No Offer or Solicitation
This communication is for informational purposes and is not intended to,
and shall not, constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any offer or sale
of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
