Emera Inc., ATCO Ltd., and Canadian Utilities Limited have entered into a definitive agreement to combine Emera and Canadian Utilities in a merger of equals, creating a Canadian utility and energy infrastructure company with a pro forma enterprise value of approximately $72 billion. The combined company, which will operate as Emera, is expected to rank among the top 20 North American utilities, with roughly $45 billion in rate base and about six million customers across Canada, the United States, and international markets.
Under the arrangement, Emera will acquire all of the issued and outstanding shares of Canadian Utilities and ATCO, with Canadian Utilities valued at approximately $14.3 billion. Based on Canadian Utilities’ implied enterprise value of approximately $28 billion, the companies describe the transaction as the largest merger between two Canadian companies to date. Concurrent with the combination, ATCO will spin off its industrial services operations into a newly formed, publicly traded company referred to as New ATCO.
Canadian Utilities Class A shareholders, other than ATCO, will receive 0.755 of an Emera common share for each share held, and Class B shareholders, other than ATCO, will receive 0.819 of an Emera common share for each share held. ATCO Class I and Class II shareholders will receive 0.865 of an Emera common share for each share held, along with one New ATCO share of the corresponding class for each ATCO share held. Canadian Utilities preferred shares will remain outstanding, and no fractional Emera shares will be issued.
Following completion, existing Emera shareholders are expected to own approximately 60 percent of the combined company, while former ATCO and Canadian Utilities shareholders are expected to own approximately 40 percent. Canadian Utilities shareholders are also expected to benefit from an increase of roughly 20 percent in dividend income.
New ATCO will be a standalone industrial services company focused on housing, defence, and investments, including ports and retail energy. Headquartered in Calgary, it will hold the businesses ATCO is carving out of the utility combination, giving ATCO shareholders continued exposure to those operations alongside their stake in the combined energy company. All of New ATCO’s voting shares will be distributed to ATCO’s sole voting shareholder, Sentgraf Enterprises Ltd., while the non-voting shares will be distributed to existing ATCO non-voting shareholders on a pro rata basis.
The combined company will maintain its public company headquarters in Halifax and Canadian Utilities’ corporate and operational headquarters in Calgary and Edmonton, along with a continued presence in Perth, Australia. Its U.S. operations will remain headquartered in Tampa, Florida. With roughly 95 percent of earnings expected to come from regulated utilities and about 80 percent generated in Florida and Alberta, the company plans to carry out a $32 billion capital plan through 2030, supporting expected average annual rate base growth of 7 to 8 percent.
Emera president and chief executive officer Scott Balfour will serve as chief executive officer of the combined company. Nancy Southern, chairperson and chief executive officer of ATCO, will become co-chairperson of the board alongside Emera’s current chairperson, Karen Sheriff, and will also serve as chairperson and chief executive officer of New ATCO. Bob Myles will continue as chief executive officer of Canadian Utilities. The combined company’s board will have 13 members, seven put forward by Emera and six by Canadian Utilities.
“Today marks an important moment for our companies and the customers and communities we serve,” Emera president and CEO Scott Balfour said in a press release. “This merger creates a Canadian utility and energy infrastructure powerhouse with the scale, financial capacity and expertise to invest in the systems our customers will rely on for decades. As demand rises from electrification trends and major infrastructure development, the combined company will be better positioned to help meet growing energy needs and power Canada’s growth ambitions.”
“This transaction represents a defining next chapter for ATCO,” said Nancy Southern, Chair and CEO of ATCO. “For nearly eight decades, our people have built businesses that provide essential infrastructure and services to communities and countries. Today, we are creating a structure that we believe unlocks the full growth potential of these businesses and positions them to play an even greater role in powering the future.”
"This merger is about unlocking the next wave of growth for Canadian Utilities and the customers and communities we serve," said Bob Myles, Canadian Utilities Limited CEO. "By bringing Canadian Utilities and Emera together, we will combine complementary strengths, proven operating expertise and greater financial capacity to invest in the energy infrastructure needed for the future.”
On the legal side, Osler, Hoskin & Harcourt LLP is acting as legal counsel to Emera. Blake, Cassels & Graydon LLP is acting as legal counsel to ATCO, with Felesky Flynn LLP serving as its Canadian tax counsel. Stikeman Elliott LLP is advising the Canadian Utilities special committee, and Norton Rose Fulbright Canada LLP is advising the ATCO special committee.
On the financial side, Lazard is acting as lead financial advisor to Emera, with Scotiabank also advising. Gordon Dyal & Co. LLC is acting as lead financial advisor to ATCO and Canadian Utilities, while BMO Capital Markets is advising the Canadian Utilities special committee and CIBC World Markets Inc. is advising the ATCO special committee.
Sentgraf Enterprises Ltd., which holds all of ATCO’s voting shares and approximately 27 percent of its non-voting shares, has entered into a voting support agreement in favour of the transaction. ATCO, which holds all of Canadian Utilities’ voting shares and approximately 37 percent of its non-voting shares, has similarly agreed to support the deal.
The transaction will be carried out through a court-approved plan of arrangement under the Canada Business Corporations Act and requires approval from ATCO and Canadian Utilities securityholders, generally at thresholds of at least two-thirds of votes cast, as well as a simple majority of Emera shareholders for the issuance of Emera shares. As part of the arrangement, ATCO shareholders will also be asked to approve continuing ATCO as a federal corporation, a step required to complete the transaction. Closing is further subject to customary court, regulatory, and stock exchange approvals, including those of the Court of King’s Bench of Alberta, the Alberta Utilities Commission, the U.S. Federal Energy Regulatory Commission, the U.S. Federal Communications Commission, and Mexico’s Comisión Nacional Antimonopolio, along with approvals or notifications under Canadian, Australian, and U.S. competition and foreign investment laws. Special meetings of securityholders are expected in early 2027, and the transaction is expected to close in the third or fourth quarter of 2027.
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