Emera strikes all-stock deal for Canadian Utilities and ATCO, forming a $72-billion utility giant

Halifax-based Emera Inc. has agreed to combine with Calgary’s Canadian Utilities Ltd. and its parent, ATCO Ltd., in an all-share transaction that would create one of the 20 largest utilities in North America. The companies said Tuesday the merged business would have an enterprise value of about $72 billion, a rate base of roughly $45 billion and about six million customers, according to the joint announcement. Based on an implied enterprise value of $28 billion for Canadian Utilities, they described it as the largest merger in history between two Canadian companies.

Under the terms, Emera would acquire all of Canadian Utilities, with its shares valued at about $14.3 billion. Canadian Utilities Class A holders other than ATCO would receive 0.755 of an Emera share for each share, Class B holders 0.819, and ATCO Class I and Class II holders 0.865 of an Emera share plus one share of a newly created company, New ATCO. The Globe and Mail reported that Emera has a market value of about $21 billion, putting the equity value of the combination at $35.3 billion. Reuters, in a report carried by BNN Bloomberg, said the offer values Canadian Utilities Class A shares at about $51.57, a premium of roughly 0.7 per cent to Monday’s close, citing LSEG data.

Emera shareholders would own about 60 per cent of the merged company and former ATCO and Canadian Utilities shareholders about 40 per cent. The business would keep the Emera name and its public-company head office in Halifax, while Canadian Utilities’ corporate and operational headquarters would stay in Calgary and Edmonton, and Emera’s U.S. operations would remain based in Tampa, Fla. Emera chief executive Scott Balfour would lead the combined company, and ATCO chair and CEO Nancy Southern would become co-chair of a 13-member board alongside Emera chair Karen Sheriff. Canadian Utilities CEO Bob Myles would join Emera’s executive team and keep running the Alberta operations.

As part of the deal, ATCO’s non-utility businesses, including housing, defence, ports and retail energy, would be spun out as New ATCO, a separate Calgary-based public company led by Southern. Its voting shares would go to Sentgraf Enterprises Ltd., the Southern family holding company, which has signed an agreement to vote its ATCO shares in favour of the transaction. The Globe reported that Sentgraf would own roughly seven per cent of Emera if the deal closes, and that Southern said the value of ATCO’s non-utility holdings is not reflected in its current share price.

The companies are pitching scale as the answer to rising demand for electricity and natural gas infrastructure. Reuters noted that electrification and industrial growth are driving consolidation across the North American power sector. The merged company plans a $32-billion capital program through 2030 and expects annual rate base growth of seven to eight per cent. About 95 per cent of its earnings would come from regulated utilities, with roughly 80 per cent generated in Florida and Alberta, and Canadian Utilities Class A shareholders would see an expected dividend income increase of about 20 per cent, the release said.

“Our goal is to create a Canadian champion,” Balfour told the Globe, saying the larger company would have the financial strength to build networks for data centres, new natural gas pipelines and integrated provincial grids. He said Prime Minister Mark Carney’s push to attract up to $1 trillion in infrastructure investment encouraged the parties to reach a deal. “Natural gas and electrical infrastructure define our industrial policy, and will power our future,” Southern said. The Globe reported the talks began 15 months ago, when Balfour pitched a merger over lunch at Calgary’s Ranchmen’s Club during the 2025 Stampede, and that ATCO code-named the effort Project Maple.

The transaction needs a long list of approvals. Two-thirds of votes cast by ATCO and Canadian Utilities securityholders, a majority of Canadian Utilities’ minority Class A holders and a simple majority of Emera shareholders must sign off, along with the Court of King’s Bench of Alberta, the Alberta Utilities Commission, U.S. energy and communications regulators, Mexico’s antitrust authority and reviews under Canada’s Competition Act and Canada Transportation Act, according to the release. Special meetings are expected in early 2027 and closing in the third or fourth quarter of that year. Until then, the companies say they will continue to operate independently and customers can expect continued service.

This article is general information and is not investment advice.

Sources: Emera, ATCO and Canadian Utilities joint news release (CNW); The Globe and Mail; BNN Bloomberg (Reuters).