Emera to Acquire Canadian Utility Company for C$14.3 Billion

en.Wedoany.com Reported - On October 6, Emera, ATCO, and Canadian Utilities signed a definitive agreement under which Emera will acquire all outstanding shares of Canadian Utilities through an all-stock transaction, with the latter's equity valued at approximately C$14.3 billion. The transaction will be implemented by way of a court-approved plan of arrangement under the Canada Business Corporations Act, and the two parties will integrate through a "merger of equals"; upon completion of the transaction, the combined company is expected to have an enterprise value of approximately C$72 billion, a regulated rate base of approximately C$45 billion, and will encompass 12 regulated utilities serving approximately 6 million customers.

Under the terms of the transaction, shareholders of Canadian Utilities Class A shares other than ATCO will receive 0.755 of an Emera common share for each share held, and Class B shareholders will receive 0.819 of an Emera common share per share; ATCO's Class I and Class II shareholders will receive 0.865 of an Emera common share per share and will each receive 1 New ATCO share of the corresponding class. Canadian Utilities preferred shares will continue to exist. Upon completion of the transaction, existing Emera shareholders are expected to hold approximately 60% of the combined company, with former ATCO and Canadian Utilities shareholders collectively holding approximately 40%.

As part of the transaction structure, ATCO's housing, defense, and investment businesses will be spun off into a newly formed publicly listed company, New ATCO, including its ports and retail energy businesses. ATCO currently holds approximately 37% of Canadian Utilities' non-voting shares and all of its voting shares, and has entered into a voting support agreement agreeing to support the transaction. ATCO's other shareholders will receive New ATCO shares of their original share class in addition to Emera shares.

The combined company will continue to use the Emera name, with the public company headquarters remaining in Halifax, Nova Scotia, and Canadian Utilities' corporate and operational headquarters in Calgary and Edmonton continuing to be retained. Emera's current Chief Executive Officer, Scott Balfour, will serve as CEO of the combined company following closing; the board of directors is planned to have 13 seats, with Emera nominating 7 directors and Canadian Utilities nominating 6 directors.

The two companies have established a combined capital expenditure plan of C$32 billion through 2030, which is expected to correspond to average annual rate base growth of 7% to 8%. The related investments will cover electrification, transmission, energy infrastructure, and large load projects in Canada, the United States, and Australia. Approximately 80% of the combined assets are expected to be concentrated in Florida and Alberta, Canada.

The transaction still requires approval from ATCO and Canadian Utilities security holders, as well as court and relevant regulatory approvals. Special meetings of shareholders are planned to be held in early 2027, and the transaction is expected to close in the third or fourth quarter of 2027.