The foundations for a new Canadian energy “powerhouse” were established during the summer of last year, amid rising trade disputes with the United States, Ottawa’s urgent push for new nation-building infrastructure, and two companies positioned at a pivotal juncture across the country.
On Tuesday, Emera Inc. from Halifax and Canadian Utilities based in Calgary revealed their intention to merge into a new entity valued at $72 billion, which would rank as one of the largest utility companies on the continent, equipped to capitalize on the surge in power demand.
At the same time, Atco Ltd., the majority owner of Canadian Utilities, is reshaping its identity to become a more agile company concentrating on defence, housing, and other infrastructure projects — including those in remote and isolated areas — as these needs rise in priority for governments.
Nancy Southern, CEO of Atco, noted that Scott Balfour, her counterpart at Emera, reached out with the proposal 15 months ago.
“Scott, like me, is a passionate patriot, a true Canadian, and he began considering how we could create a strong Canadian energy powerhouse,” she shared.
Southern mentioned that around the same period, she was contemplating how Canadian Utilities, where she serves as executive chair, could scale up to meet the growing demand from artificial intelligence data centers and the increasing electrification for sustainable 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.
“How do we reach the next threshold? How do we elevate to the next level?” she questioned.
Balfour stated that Emera was also undergoing a transformation, streamlining its portfolio, enhancing its financial stability, and preparing for the next phase of growth while a “Canada Strong” sentiment was gaining traction nationwide.
“You know what? It’s time to create a Canadian champion and ensure there’s a robust Canadian enterprise capable of driving growth, with the financial capacity to support the pressing need for new infrastructure in this nation,” he reflected.
The merged entity will function under the Emera name, maintaining its public company headquarters in Halifax along with corporate and operational offices in Calgary and Edmonton. Balfour will continue to lead the company. Following the merger, Emera aims to serve six million customers across various regions in Canada, as well as in the United States, Mexico, the Caribbean, and Australia.
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The merged Emera-Canadian Utilities intends to invest $32 billion in capital through 2030. Emera anticipates that 80 percent of its operations after the merger will be concentrated in Florida and Alberta, which are two of the fastest-growing areas in North America.
Southern will continue to lead a restructured Atco and co-chair Emera’s board.
“After the merger and once the transaction is finalized, you’re going to witness a very dynamic Atco — entrepreneurial, ready to compete, unafraid of challenging and remote conditions, with a team that has significant experience,” she informed analysts during a conference call earlier on Tuesday.
She remarked that it was an appropriate moment for the family-led firm to divest from its investment in Canadian Utilities, an asset it has held since 1980.
“From a pure utility standpoint, we don’t see ourselves being able to compete in an era where scale is increasingly critical,” she stated.
“As a family, we have never wanted to restrict our businesses, and we believe it is crucial to allow our enterprises to pursue the opportunities that arise.”
This transition also enables Atco’s remaining operations to chase opportunities in defence, energy security, and housing — all significant priorities under Prime Minister Mark Carney’s administration as it grapples with a challenging 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.
Southern mentioned in the interview that the investor base that has historically favored Atco for its utility operations is likely to change. The company’s infrastructure capabilities had been overshadowed while being categorized with the power segment, she indicated.
“We genuinely believe this will unlock greater value for the Atco businesses, and I anticipate a shift in ownership. Atco will be significantly smaller, and thus it will not be a stock indexed for fund investors,” Southern stated.
“We will need to engage in considerable explanation and education regarding the outlook of the two companies post-merger.”
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According to the agreement, Emera will acquire all outstanding shares of Canadian Utilities, which are valued at approximately $14.3 billion. Current Emera shareholders are anticipated to own around 60 percent of the new utility, while former Atco and Canadian Utilities shareholders will likely hold about 40 percent.
Shareholders of Emera, Canadian Utilities, and Atco will vote on the deal early next year. The transaction is also subject to approvals from courts, regulators, and stock exchanges across various jurisdictions.
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