A massive transformation is taking shape in Canada's utility sector as Emera and ATCO agree to combine, creating a utility with a pro forma enterprise value of approximately CA$72 billion ($50.6 billion) in what the companies describe as the largest merger in Canadian history.

The agreement, announced Tuesday, will combine Emera's regulated utility operations with those of Canadian Utilities, an ATCO subsidiary, creating a company serving roughly 6 million customers across Canada, the United States and other international markets.

The transaction is structured as an all-share acquisition of Canadian Utilities by Emera, putting the equity value of Canadian Utilities at approximately CA$14.3 billion. Based on an implied enterprise value of about CA$28 billion for Canadian Utilities, the companies said the transaction would represent the largest merger between two Canadian companies.

The scale of the proposed combination is enormous, effectively bringing two major utility footprints under one roof.

Emera to Lead Combined Utility

The new company will continue operating under the Emera name, with current CEO Scott Balfour remaining at the helm.

The combined utility is expected to rank among the 20 largest utilities in North America.

Emera shareholders would control approximately 60% of the combined company, while former ATCO and Canadian Utilities shareholders would hold the remaining 40%.

The transaction will also reshape ATCO itself.

ATCO to Spin Off Non-Utility Businesses

ATCO plans to separate its non-utility operations into a new entity called New ATCO.

That company will operate under a separate corporate structure focused on businesses including housing, defense, industrial operations and investments. Its portfolio will also include ports and retail energy operations.

Meanwhile, the newly combined Emera is expected to derive approximately 95% of its earnings from regulated utilities.

About 80% of earnings are expected to come from operations in Florida and Alberta, linking two of the companies' most important geographic markets. Emera has a significant presence in Florida, while Canadian Utilities has a major footprint in Alberta.

Bigger Utility Aims to Fund Growing Infrastructure Needs

The companies said the enlarged utility will have greater financial capacity to support capital-intensive projects as demand for electricity and other infrastructure continues to grow.

The combination effectively creates a larger financial engine for projects that can require enormous amounts of capital, from power infrastructure to broader utility investments.

Following completion, the combined Emera will be headquartered in Halifax, Nova Scotia.

Canadian Utilities' corporate and operating headquarters will remain in Calgary and Edmonton, Alberta, while Emera's U.S. operations will continue to be based in Tampa, Florida.

Closing Could Come in 2027

The transaction is expected to close in the third or fourth quarter of 2027, assuming it clears shareholder, court and regulatory hurdles in Canada, the United States, Australia and Mexico.

The companies will require approvals from shareholders of Emera, ATCO and Canadian Utilities, along with regulatory clearance from authorities including the Alberta Utilities Commission, the U.S. Federal Energy Regulatory Commission and the U.S. Federal Communications Commission.

The international regulatory review adds another layer to an already complex transaction involving major utility operations across several jurisdictions.

Legal Teams Line Up for Historic Merger

Osler Hoskin & Harcourt LLP is advising Emera on the transaction.

Blake Cassels & Graydon LLP is advising ATCO, with partners Chris Harris, Dan McLeod, Jeff Bakker and Michael Barrett leading the team.

Felesky Flynn LLP is serving as ATCO's Canadian tax counsel.

If approved and completed as planned, the combination will reshape the Canadian utility landscape, creating a company with billions in enterprise value, millions of customers and a predominantly regulated earnings base spanning major markets on both sides of the border.