The foundation for a new energy “powerhouse” in Canada was established during the summer of the previous year, coinciding with increasing trade tensions with the United States, Ottawa’s drive for new infrastructure projects, and two companies on opposite coasts facing pivotal decisions.
On Tuesday, Emera Inc., based in Halifax, and Calgary’s Canadian Utilities revealed their plans to merge into a new entity valued at $72 billion, positioning it among the largest utilities in North America, equipped to capitalize on the rising demand for electricity.
Atco Ltd., the parent company of Canadian Utilities, is repositioning itself as a more agile entity, concentrating on sectors like defence, housing, and other infrastructure projects, especially in remote areas as these needs become more pressing for governments.
Nancy Southern, CEO of Atco, noted that her counterpart at Emera, Scott Balfour, had initiated discussions about a merger 15 months ago.
“Scott, like me, is a devoted Canadian, and he started to consider how we could form a robust Canadian energy powerhouse,” she stated.
Around the same period, Southern was contemplating how Canadian Utilities, where she holds the position of executive chair, could scale up to address the surging demand from artificial intelligence data centers and the shift towards electrification for clean energy.
The parent company of Nova Scotia Power, ATCO and Canadian Utilities announced its plan to merge this week. Scott Balfour, president and CEO of Emera, will lead the merged company.
“What are the steps to reach the next level?” she asked.
Balfour indicated that Emera was also in a similar position, working to streamline its portfolio, enhance its financial standing, and prepare for a new era of growth while the sentiment of “Canada Strong” was gaining traction nationwide.
“It’s time to create a Canadian champion and ensure a strong Canadian entity is positioned to drive growth, equipped with the financial capability to support the generational demand for new infrastructure in this country,” he reflected.
The newly merged utility will operate under the Emera name, maintaining its public company headquarters in Halifax and its corporate and operational offices in Calgary and Edmonton. Balfour will continue to lead the organization. Following the merger, Emera will cater to six million customers across various regions of Canada, as well as in the United States, Mexico, the Caribbean, and Australia.
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The merged Emera and Canadian Utilities aims to invest $32 billion in capital expenditure by 2030. Emera anticipates that 80 percent of its operations after the merger will be concentrated in Florida and Alberta, two of North America’s fastest-growing regions.
Southern will continue to lead a restructured Atco and co-chair the board of Emera.
“After the merger and the completion of the entire transaction, you will observe a very dynamic Atco — entrepreneurial, prepared to compete, unafraid of challenging and isolated environments, with a proven track record,” she informed analysts during a conference call earlier on Tuesday.
She expressed that it was an opportune moment for the family-controlled company to divest its stake in Canadian Utilities, a relationship dating back to 1980.
“From a utility standpoint, we do not foresee being able to compete in a landscape where scale is increasingly critical today,” she remarked.
“As a family, we never wished to restrict our businesses, and we believe … it is crucial to allow our enterprises to explore available opportunities.”
This transition also enables Atco’s remaining ventures to pursue prospects in defence, energy security, and housing — all significant priorities of Prime Minister Mark Carney’s administration as it navigates a turbulent cross-border trade relationship, affordability challenges, and geopolitical instability.
A deal involving Alberta-based ATCO could create one of Canada’s largest utilities. As CBC’s Ted Henley reports, Canadian energy services company Emera says it will acquire ATCO-controlled Canadian Utilities in a $14.3 billion deal amid booming electricity demand.
In her interview, Southern indicated that the investor base that has long favored Atco for its utilities division might experience a shift. She mentioned that its infrastructure offerings had been overlooked while grouped with the power sector.
“We genuinely believe this will unlock more value for the Atco businesses, and I anticipate a change in ownership dynamics. Atco will become considerably smaller, and thus it won’t be an indexed stock for fund investors,” Southern explained.
“We will need to undertake significant efforts in explaining and educating on how the two companies will appear post-transaction.”
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As part of the agreement, Emera will acquire all outstanding shares of Canadian Utilities, which is estimated to be valued at approximately $14.3 billion. Current Emera shareholders are projected to possess about 60 percent of the merged utility, while former Atco and Canadian Utilities shareholders are expected to hold around 40 percent.
The shareholders of Emera, Canadian Utilities, and Atco will cast their votes on the deal early next year. The transaction is also subject to approval from courts, regulatory bodies, competition authorities, and stock exchanges in various jurisdictions.
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