Emera has agreed to merge with Canadian Utilities in an all-share deal valued at approximately C$14.3bn, creating a Canada-headquartered electricity and natural gas company.
The transaction, announced by Emera, ATCO and Canadian Utilities, will combine the companies in a merger of equals, forming an energy provider with approximately six million customers across the US, Canada and international markets and a pro forma enterprise value of roughly C$72bn.
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Under the terms of the agreement, Emera will acquire all outstanding shares of Canadian Utilities and ATCO.
Canadian Utilities Class A shareholders, excluding ATCO, will receive 0.755 of an Emera common share for each share held, while Class B shareholders will receive 0.819 of an Emera share.
ATCO shareholders are to receive 0.865 of an Emera share for each Class I or Class II share, in addition to shares in a new publicly traded company, New ATCO, which will consist of ATCO’s industrial services business.
The combined company will retain the Emera name and maintain its public headquarters in Halifax, Nova Scotia.
Canadian Utilities will keep its corporate and operational headquarters in Calgary and Edmonton, with continued presence in markets such as Perth, Australia.
Emera’s US operations will remain based in Tampa, Florida.
The merged group will be headed by Scott Balfour, president and CEO of Emera.
Joining the executive team from Canadian Utilities will be Bob Myles as CEO and Becky Penrice as executive vice-president, corporate transformation and integration.
Balfour said: “Today marks an important moment for our companies and the customers and communities we serve. This merger creates a Canadian utility and energy infrastructure powerhouse with the scale, financial capacity and expertise to invest in the systems our customers will rely 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.”
Following completion of the transaction, Emera shareholders will own around 60% of the combined group, with ATCO and Canadian Utilities shareholders holding the remaining 40%.
The companies expect the merger to enhance their ability to invest in large-scale energy and infrastructure projects, particularly in Florida and Alberta, areas which currently account for around 80% of combined earnings.
Approval of the deal comes after an independent review by special committees of the boards of both ATCO and Canadian Utilities.
The boards of Emera, ATCO and Canadian Utilities have unanimously recommended that shareholders vote in favour.
According to the companies, customer service and operations are expected to continue without disruption during the merger process.
