Halifax-based Emera Inc. and Calgary-based Canadian Utilities announced a merger of equals on Oct. 6 that would create an energy company with a pro forma enterprise value of about $72 billion, in what the companies called the largest merger in Canadian corporate history.
Under the agreement, Emera will acquire all outstanding shares of Canadian Utilities, which have an equity value of about $14.3 billion. ATCO Ltd., the controlling shareholder of Canadian Utilities, is also a party to the deal.
The combined company will operate under the Emera name and keep its public company headquarters in Halifax. Corporate and operational offices will be maintained in Calgary, Edmonton and Perth, Australia.
Emera shareholders will hold about 60 per cent of the combined company, and former ATCO and Canadian Utilities shareholders will hold about 40 per cent, the companies said in a news release filed with U.S. regulators.
Canadian Utilities Class A shareholders, other than ATCO, will receive 0.755 Emera common shares per share. Class B shareholders, other than ATCO, will receive 0.819 Emera shares. ATCO’s Class I and Class II shareholders will receive 0.865 Emera shares plus one share of a new ATCO. The release did not state a premium.
The new ATCO will be a spin-off of ATCO’s industrial services businesses. ATCO chief executive Nancy Southern will chair and lead it, and she will serve as co-chair of the combined company’s board with Karen Sheriff. Scott Balfour will be chief executive of the combined company, and Bob Myles will be chief executive of Canadian Utilities.
Southern said ATCO could no longer compete as a utility owner on its own. “I don’t see us, from a strict utility perspective, being able to compete in a world where scale matters so much today,” she said. She told analysts that ATCO would be much smaller after the deal and would no longer be an indexed stock for fund investors.
The combined board will have 13 members, seven nominated by Emera and six by Canadian Utilities, according to the release. The companies said the new ATCO plans to focus on defence, housing, energy security and infrastructure, including in remote locations.
The companies said the combined business would serve about six million customers across Canada, the United States, Mexico, the Caribbean and Australia. It would operate 12 regulated utilities and plans $32 billion in capital spending through 2030. About 95 per cent of combined earnings are expected to come from regulated utilities.
The geographic weight of the deal sits in two places. About 70 per cent of Emera’s earnings come from Florida, and about 80 per cent of Canadian Utilities’ earnings come from Alberta, the companies said. Global News reported that roughly 80 per cent of post-merger operations are expected to be in Florida and Alberta.
For Alberta customers, the immediate question is regulatory. The Alberta Utilities Commission is among the bodies that must approve the deal, and the release did not say whether the companies expect any change to rates or service. The companies said they expect an increase to adjusted earnings per share in the first full year after closing, but did not disclose expected savings from the merger.
Canadian Utilities Class A shareholders can expect about a 20 per cent increase in dividend income, the companies said. Future dividends will be set by Emera’s board after the deal closes.
The transaction needs a two-thirds vote from the ATCO and Canadian Utilities share classes, and a simple majority of Emera votes for the share issuance. Special meetings are expected in early 2027.
Approvals are also required from the Court of King’s Bench of Alberta, the U.S. Federal Communications Commission and Federal Energy Regulatory Commission, Mexico’s antitrust commission, the TSX and NYSE, and competition and foreign-investment reviewers in Canada, the United States and Australia. The companies expect the deal to close in the third or fourth quarter of 2027.
The story is developing. The terms above come from the companies’ own announcement and Global News coverage, and regulators have not yet commented.
If you find reporting like this useful, consider supporting Canada News Media, an independent Canadian newsroom with no corporate parent.
Via Global News: Emera inks Canadian Utilities merger deal with ATCO to create $72B energy powerhouse. Terms also drawn from the companies’ Oct. 6 release (Form 6-K, U.S. Securities and Exchange Commission).
