Emera and Canadian Utilities to Merge in Largest Canadian Deal, Creating $72 Billion Utility

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Summary · why it matters

Emera, ATCO and Canadian Utilities announced a definitive agreement to combine Emera and Canadian Utilities in a merger of equals, creating a Canadian utility and energy infrastructure powerhouse with approximately $72 billion in pro forma enterprise value, approximately $45 billion in rate base and about six million customers. Based on the implied enterprise value of Canadian Utilities of $28 billion, the transaction is expected to be the largest merger in history between two Canadian companies and will form a Top 20 North American utility. Under the all-share terms, Emera will acquire all outstanding shares of Canadian Utilities, valued at approximately $14.3 billion, with Canadian Utilities Class A shareholders other than ATCO receiving 0.755x of an Emera common share, Class B shareholders other than ATCO receiving 0.819x, and ATCO Class I and Class II shareholders receiving 0.865x. Emera shareholders are expected to own approximately 60% of the combined company and former ATCO and Canadian Utilities shareholders approximately 40%, with Canadian Utilities shareholders benefiting from an approximately 20% expected increase in dividend income. In connection with the transaction, ATCO will spin off its housing, defence and investments businesses, including ports and retail energy, into a new publicly traded company, New ATCO, led by Nancy Southern as Chair and Chief Executive Officer, while Scott Balfour will serve as CEO of the combined company, which will operate as Emera and keep its public company headquarters in Halifax. The combined company plans a $32 billion capital plan through 2030 supporting expected average annual rate base growth of 7% to 8%, and the transaction, subject to shareholder, court and regulatory approvals, is expected to close in the third or fourth quarter of 2027.

Impact on assets 1

Energy Transition & Power Demand▲
Emera Incorporated
EMA
▲ PositiveCapitalrelevance

Emera acquires Canadian Utilities in an all-share merger of equals, creating a $72B utility and keeping its Halifax HQ.

Off-coverage companies 2

ATCO Ltd.i
Private▲ PositiveCapitalrelevance

ATCO receives Emera shares for its Canadian Utilities stakes and spins off housing, defence and investments into New ATCO.

Canadian Utilities Limitedi
Private▲ PositiveCapitalrelevance

Canadian Utilities is being acquired by Emera at a $28B implied enterprise value, with shareholders getting a ~20% dividend increase.