Halifax-based Emera announced on Tuesday its plan to acquire Canadian Utilities in a deal valued at $14.3 billion, to form one of the largest utility companies in Canada. This move comes as power firms aim to expand to meet the rising electricity demand.
Following the merger, Emera shareholders are set to hold approximately 60% of the combined entity, which will have a total worth of about $72 billion. Canadian Utilities shareholders will own the remaining 40%, Emera revealed.
Emera’s portfolio includes a stake in around a dozen energy-related operations across Atlantic Canada, the United States, and the Caribbean, with Nova Scotia Power falling under its umbrella.
The consolidation in the North American power sector is being fueled by escalating power needs due to increased electrification and industrial expansion. Companies are looking to consolidate to pool resources for investments in grid upgrades and transmission infrastructure.
In the deal structure, Class A shareholders of Canadian Utilities, except for ATCO, will receive 0.755 shares of Emera for each share they hold, while Class B shareholders will receive 0.819 shares of Emera per share.
The acquisition values Canadian Utilities’ Class A shares at approximately $51.57 each, representing a premium of about 0.7% over the stock’s closing price on the preceding Monday, as per LSEG data.
Emera anticipates that the acquisition will fortify its financial position and facilitate a planned $32 billion capital program until 2030, with an expected annual rate-base growth of seven to eight percent.
Upon the expected closure of the deal in the third or fourth quarter of 2027, the combined entity will be headed by Emera’s current president and CEO, Scott Balfour. The rebranded company will continue to operate as Emera, with its public company headquarters remaining in Halifax, alongside Canadian Utilities’s corporate and operational centers in Calgary, Edmonton, and Perth, Australia.
Simultaneously, ATCO, which holds almost 37% of the outstanding non-voting shares and all voting shares of Canadian Utilities, will spin off to form a publicly traded industrial services company named New ATCO, as announced by Emera. Nancy Southern, ATCO’s chair and CEO, will lead the new entity, focusing on sectors such as housing, defense, and investments in ports and retail energy.
