Historic Canadian transaction brings together major utility operations in Alberta, Florida and other markets, creating a Top 20 North American utility with six million customers and a $32-billion capital plan

One of the largest restructurings in the history of Canada’s energy sector is set to create a new $72-billion utility and energy infrastructure giant with major operations stretching from Alberta to Florida.

Halifax-based Emera Inc., Calgary-based ATCO Ltd. and Canadian Utilities Ltd. announced October 6 that Emera and Canadian Utilities will combine in what the companies describe as the largest merger between two Canadian companies in history.

The combined company is expected to rank among the Top 20 utilities in North America, with approximately $72 billion in pro forma enterprise value, a $45-billion regulated rate base and roughly six million customers across Canada, the United States, Australia, the Caribbean and other markets.

The transaction values the acquisition of Canadian Utilities shares at approximately $14.3 billion and is structured largely as an all-share deal.

Emera President and CEO Scott Balfour said the combination creates a Canadian utility and energy infrastructure company with significantly greater capacity to finance major projects.

The merger, he said, will give the company the scale, financial capacity and expertise required to invest in energy systems that customers will depend 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,” Balfour said when the transaction was announced.

Alberta and Florida become key growth engines

One of the most significant features of the merger is the geographic combination of Canadian Utilities’ large Alberta operations with Emera’s substantial electricity and natural gas utility businesses in Florida.

Approximately 95 per cent of the combined company’s earnings are expected to come from regulated utilities, while roughly 80 per cent of adjusted earnings will be generated in Alberta and Florida — two jurisdictions experiencing substantial population, industrial and electricity-demand growth.

Canadian Utilities currently generates the majority of its earnings from Alberta, where the company operates electricity and natural gas transmission and distribution infrastructure through ATCO Energy Systems and related businesses.

Emera, meanwhile, has become increasingly dependent on its U.S. utilities since acquiring Tampa-based TECO Energy for approximately US$10.4 billion in 2016.

Florida has grown into Emera’s largest earnings market, supported by rapid population growth and continuing investment in electricity generation, transmission and distribution infrastructure.

Bringing the two businesses together significantly broadens Emera’s geographic exposure while giving Canadian Utilities shareholders access to a much larger North American utility platform.

$32 billion of investment planned

The size of the combined capital program is particularly significant for the Canadian energy sector.

Emera and Canadian Utilities expect to execute approximately $32 billion in capital investment through 2030, supporting average annual rate-base growth of approximately seven to eight per cent.

Those investments are expected to include electricity and natural gas transmission, generation and distribution infrastructure, grid modernization and projects required to connect major new customers.

The companies specifically identified electrification, transmission infrastructure, energy security, large-load customers, export infrastructure and other major energy projects as potential areas for investment.

That could become increasingly important in Alberta as the province attempts to attract large industrial projects and data centres requiring enormous amounts of dependable electricity and natural gas infrastructure.

Rapid growth in artificial intelligence and hyperscale data centres is becoming an important new source of electricity demand across North America. Alberta has been actively positioning itself as a destination for major data-centre investment because of its natural gas resources, available land and ability to develop large amounts of generation capacity.

The expanded Emera would be considerably better positioned financially to participate in that infrastructure buildout.

Canadian headquarters retained

The combined utility will operate under the Emera name.

Its public company headquarters will remain in Halifax, while Canadian Utilities’ corporate and operational headquarters in Calgary and Edmonton will be maintained.

The company will also retain a major presence in Perth, Australia, while Emera’s U.S. operations will continue to be headquartered in Tampa, Florida.

Balfour will become president and CEO of the combined company.

ATCO Executive Chair Nancy Southern will become co-chair of Emera’s board alongside current Emera Chair Karen Sheriff.

Existing Emera shareholders are expected to own approximately 60 per cent of the combined company, while Canadian Utilities and ATCO shareholders will collectively own approximately 40 per cent.

ATCO becomes a different company

The transaction also represents a major transformation of ATCO.

ATCO currently controls Canadian Utilities. As part of the deal, ATCO’s utility interests will become part of Emera while its remaining operations will be spun out into a separately traded company known as New ATCO.

New ATCO will be headquartered in Calgary and focus primarily on housing, defence, ports, retail energy and other industrial and infrastructure investments.

Southern will serve as chair and CEO of the new company.

That effectively separates ATCO’s regulated utility operations from the company’s faster-growing industrial and infrastructure businesses.

Scale increasingly important in energy

The merger comes as utilities across North America face increasingly capital-intensive investment requirements.

Population growth, electrification, new industrial developments, LNG and export infrastructure, data centres and grid modernization are all placing pressure on utilities to build more generation and transmission capacity.

At the same time, the cost of financing multi-billion-dollar energy infrastructure projects has increased the importance of corporate scale and access to capital.

The Emera-Canadian Utilities combination is designed in part to address that challenge. The companies say the larger balance sheet should improve financial flexibility and credit-rating thresholds, allowing the business to finance a much larger infrastructure program.

For Western Canada, the transaction also means one of Alberta’s most established utility platforms will become part of a considerably larger North American energy company capable of competing for major infrastructure investments on both sides of the border.

Deal still requires approvals

The companies will continue operating independently until the transaction closes.

The merger still requires shareholder, court, stock exchange and regulatory approvals in several jurisdictions, including Canada, the United States and Australia.

Special shareholder meetings are expected in early 2027, with the companies targeting completion of the transaction in the third or fourth quarter of 2027.

If completed, the transaction will mark a major shift in the Canadian utility landscape.

It will bring together Emera’s substantial Atlantic Canadian and Florida businesses with Canadian Utilities’ extensive Western Canadian infrastructure network, creating a Canadian-headquartered company with the scale to pursue tens of billions of dollars of energy investment.

And with electricity and natural gas demand expected to rise alongside population growth, industrial development and the expansion of AI and data-centre infrastructure, the timing of the deal puts the new Emera directly in the middle of one of the largest energy infrastructure buildouts North America has seen in decades.

Share This:

---

More News Articles