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: March 2, 2026
TO: All Essential Employees
FROM: Chris Franklin
SUBJECT: Integration Planning Update
Dear Colleagues,
I wanted to share an update following our merger integration kickoff earlier this week. The meeting focused on the initial steps toward
building a strong combined organization while respecting the unique strengths, operations, and responsibilities of both companies.
We believe
that, together, the Essential and American Water teams are aligning on a clear vision for the combined company grounded in safety, reliability,
and customer service, to generate long‑term value. Just as important, we agreed on a disciplined approach to integration, one that
prioritizes operational continuity, regulatory integrity, and respect for our people.
We also launched our Core Integration Teams, which
includes leaders from both Essential and American Water, representing our respective corporate functions, operations, and
state leadership teams listed on The Pipeline.
Additionally, as part of our ongoing commitment to transparency and communicating decisions
that have been made, I wanted to make you aware of an upcoming communication that will be distributed to employees in select parts of
the organization as part of our ongoing integration planning with American Water.
In the coming days, Operational employees within Peoples,
Delta, Aqua Ohio, Aqua Texas, Aqua North Carolina, and the Lab in Bryn Mawr and union employees within Delta, Aqua Ohio, and some union
employees within Peoples, will be receiving a letter informing them that, based on early assessments in areas with limited to no overlap
in required staffing, their employment is not expected to be negatively impacted as a result of the merger.
There will be a small number
of employees from the support functions in IT, Finance, Legal, HR, and the Contact Center who predominately or solely support Gas Operations
who will also receive letters. These communications are intended to provide clarity and reassurance to those teams while reinforcing our
commitment to open and transparent communication as decisions continue to be made throughout the regulatory and integration process.
I
understand that this information may create uncertainty and concern for those who did not receive a letter. I want to be very clear: no
news is not bad news. Decisions are being made thoughtfully, and we will continue to communicate directly as information becomes
available.
If you have questions, you can email them to Merger@Essential.co.
Thank you for your continued leadership and support as we move
through this important next phase.
Sincerely,
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.
