Emera, Canadian Utilities and ATCO Announce $72 Billion All-Stock Merger
Halifax-based Emera Inc. has agreed to an all-stock merger with Calgary-based Canadian Utilities Ltd. and its parent ATCO Ltd., creating a combined utility entity valued at approximately $72 billion. The deal includes spinning off ATCO's industrial services businesses into a new publicly traded company.
Halifax-based Emera Inc. has announced a definitive all-stock agreement to merge with Calgary-based Canadian Utilities Ltd. and its parent company ATCO Ltd. The transaction, valued at approximately $35 billion in equity, will create a combined utility entity with an estimated enterprise value of $72 billion.
Under the terms of the merger, Emera shareholders will own approximately 60% of the combined company, while Canadian Utilities and ATCO shareholders will hold roughly 40%. The exchange ratios are set at 0.755 Emera shares for each Canadian Utilities Class A share and 0.819 Emera shares for each Canadian Utilities Class B share. Reports differ slightly on the ratio for ATCO shares, with one source citing 0.86 Emera shares per ATCO share and another specifying 0.865 shares for ATCO Class I and II shareholders.
As part of the agreement, ATCO’s housing, defence, and ports businesses will be spun off into a separate publicly listed company named "New ATCO." This new entity will be controlled by Sentgraf Enterprises Ltd. and led by Nancy Southern. Sentgraf currently holds all of ATCO's voting shares and approximately 27% of its non-voting shares, and has signed a voting support agreement backing the transaction.
Scott Balfour will serve as CEO of the combined company, which will retain its headquarters in Halifax. Nancy Southern will join the board as Co-Chair alongside Karen Sheriff. If approved, Canadian Utilities shareholders are expected to receive an approximate 20% increase in dividends.
The combined company plans to execute a $32 billion capital plan through 2030, targeting average annual rate base growth of 7% to 8%. The merged entity is expected to become one of the top 20 utilities in North America, serving approximately 6 million customers with a combined rate base of $45 billion.
The transaction is subject to shareholder, court, and regulatory approvals. Sources differ on the anticipated closing timeline, with reports indicating either the third or fourth quarter of 2027, or broadly by the end of 2027.