Emera, Canadian Utilities Unveil C$72B Merger to Create Utility Powerhouse

Key Points

• Emera and Canadian Utilities agreed to a predominantly all-share merger valued at approximately C$72 billion, creating a top-20 North American utility with about 6 million customers, C$45 billion in rate base and roughly 95% of expected 2026 earnings from regulated operations. Closing is expected in late 2027, subject to approvals.
• The combined company is targeting 7%–8% annual rate-base growth through 2030, driven largely by infrastructure investment in Florida and Alberta, including electric and natural-gas networks, system modernization and capacity for large industrial and data-center loads.
• Emera shareholders are expected to own about 60% of the new company, with Canadian Utilities and ATCO shareholders owning 40%. Emera plans to maintain its dividend-growth policy, while Canadian Utilities shareholders are expected to receive a 20% dividend increase under the proposed transaction.

Emera TSE: EMA and Canadian Utilities have agreed to combine in a predominantly all-share transaction that the companies said would create a top-20 North American utility and energy infrastructure business, with an enterprise value of about C$72 billion.

The companies described the proposed merger as a way to build a larger Canadian-headquartered utility platform with greater financial capacity to fund infrastructure supporting electrification, industrial development, energy security, data centers and broader customer demand. The transaction remains subject to shareholder approvals, regulatory approvals and customary closing conditions, with closing anticipated in late 2027.

Combined Company Targets Growth in Florida and Alberta

Scott Balfour, Emera’s president and chief executive officer, said the combined company would have roughly C$45 billion of rate base, about 6 million customers across 12 regulated utilities and approximately 95% of expected 2026 earnings from regulated operations.

About 80% of adjusted earnings would come from Florida and Alberta, while about 70% of the combined rate base would be invested in electric and natural-gas transmission and distribution infrastructure, according to Balfour. Florida and Alberta are expected to represent approximately 45% and 34%, respectively, of the combined rate base.

The companies forecast high single-digit rate-base growth of 7% to 8% through 2030, supporting Emera’s existing long-term guidance for adjusted earnings-per-share growth of 5% to 7% and dividend growth of 1% to 2%.

Balfour said Tampa Electric is forecast to deliver more than 8% annual rate-base growth through 2030, while Peoples Gas has experienced approximately 4% annual customer growth since 2020. Canadian Utilities’ rate base is projected to increase to approximately C$21.4 billion in 2030 from about C$15.1 billion in 2025.

Canadian Utilities Cites Diversification and Capital Access

Canadian Utilities CEO Bob Myles said the deal would provide geographic diversification and greater access to capital as Canadian Utilities expands its investment program. The company had approximately C$16.6 billion of rate base at mid-year 2025, with 91% located in Alberta.

Canadian Utilities said approximately 95% of its 2026-2030 capital program is directed to Alberta, where it sees infrastructure opportunities in electric and natural-gas transmission and distribution, system modernization and facilities for large new loads. Myles also pointed to growth opportunities in Australia, including demand associated with mining, LNG, critical minerals and industrial energy use.

“This is not about synergies,” Myles said during the question-and-answer session, characterizing the rationale as combining two companies to pursue more growth opportunities. Balfour said there could be limited benefits in areas such as supply-chain purchasing and insurance costs, but said the central strategic case was growth rather than cost savings.

The companies said local utility operations would remain locally governed, with local regulatory engagement and investment decisions continuing within each jurisdiction’s regulatory framework.

Financial Structure, Dividend and Leadership

The transaction is structured principally as a share-for-share combination using fixed exchange ratios disclosed in the companies’ transaction materials. Emera shareholders are expected to own approximately 60% of the combined company, while Canadian Utilities and ATCO shareholders together would own the remaining 40%.

Emera expects the transaction to be accretive to earnings per share in the first full year after closing. Chief Financial Officer Jared Green said the combined entity would have a more diversified, lower-risk credit profile and that management intends to maintain cushion in its credit metrics while preserving investment-grade ratings and stable outlooks.

Emera said it intends to maintain its current dividend policy and target dividend growth of 1% to 2%, while improving its payout ratio. Canadian Utilities shareholders are expected to receive a 20% dividend increase and would benefit from adoption of Emera’s quarterly dividend, subject to final transaction terms and closing.

Balfour would remain president and CEO of the combined company, while Green would remain CFO. Myles would become a senior executive at Emera while continuing as CEO of Canadian Utilities and reporting to Balfour. Becky Penrice would join Emera’s leadership team as executive vice president of corporate transformation and integration.

The combined company would have a 13-member board, including seven directors from Emera’s current board and six directors put forward by Canadian Utilities. Nancy Southern would serve as co-chair alongside Emera Chair Karen Sheriff. Emera would continue trading on the Toronto Stock Exchange and New York Stock Exchange, with public-company headquarters in Halifax, Canadian Utilities’ corporate and operational headquarters in Calgary, and U.S. operations headquartered in Tampa.

About Emera (TSE:EMA)

Emera TSX/NYSE: EMA is a leading North American provider of energy services headquartered in Halifax, Nova Scotia, with investments in regulated electric and natural gas utilities, and related businesses and assets. The Emera family of companies delivers safe, reliable energy to approximately 2.7 million customers in the United States, Canada and the Caribbean. Our team of 7,800 employees is committed to our purpose of energizing modern life and delivering a cleaner energy future for all. Emera's common and preferred shares are listed and trade on the Toronto Stock Exchange and its common shares are listed and trade on the New York Stock Exchange.

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