The foundation for a new energy “powerhouse” in Canada was established last summer amid rising trade conflicts with the United States and an intensified effort in Ottawa for fresh infrastructure development, as two companies from opposite coasts faced pivotal decisions.
Emera Inc., based in Halifax, and Canadian Utilities from Calgary declared their intention on Tuesday to merge into a new entity valued at $72 billion, positioning themselves as one of the largest utility companies on the continent, equipped to capitalize on the increasing demand for electricity.
Simultaneously, Atco Ltd., the majority stakeholder in Canadian Utilities, is transforming itself into a more agile organization with a focus on defense, housing, and other infrastructure projects — particularly in remote areas — as these needs gain prominence on government agendas.
Nancy Southern, the CEO of Atco, revealed that Scott Balfour, her counterpart at Emera, reached out about a merger 15 months ago.
“Scott, like me, is a devoted patriot and a genuine Canadian, and he began contemplating how we could create a strong Canadian energy powerhouse,” she remarked.
Southern noted that around the same period, she was considering how Canadian Utilities, where she is the executive chair, could scale up to meet the surging needs driven by artificial intelligence data centers and the transition toward clean energy electrification.
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 steps do we take to reach the next level?” she questioned.
Emera found itself in a similar situation, working to streamline its offerings, bolster its financial standing, and prepare for the next phase of expansion, all while a sense of “Canada Strong” was gaining momentum across the nation, Balfour stated in a conversation.
“It’s time to establish a Canadian champion and ensure there’s a robust Canadian firm capable of fostering growth, with the financial resources to support the pressing need for new infrastructure in this country,” he recalled considering.
The newly merged utility will operate under the Emera name, maintaining its public company headquarters in Halifax alongside corporate and operational offices in Calgary and Edmonton. Balfour will continue to lead the organization. Following the merger, Emera will serve six million customers across various regions of Canada, as well as the United States, Mexico, the Caribbean, and Australia.
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The combined Emera and Canadian Utilities plan to invest $32 billion in capital through 2030. Emera anticipates that 80% of its operations after the merger will be concentrated in Florida and Alberta, two of the fastest-growing regions in North America.
Southern will continue as the leader of a revamped Atco and will co-chair Emera’s board.
“After the merger is finalized, you’ll witness a very dynamic Atco — entrepreneurial, prepared to compete, unafraid of challenging environments, with a proven team,” she shared with analysts during a conference call earlier on Tuesday.
She noted that it was an appropriate moment for the family-controlled company to divest its investment in Canadian Utilities, a stake it has held since 1980.
“From a utility standpoint, we don’t believe we can compete in a landscape where scale is increasingly vital,” she stated.
“As a family, we’ve never felt the desire to restrict our businesses, and we think it’s crucial to let our enterprises take advantage of the opportunities available to them.”
This shift also enables Atco’s remaining operations to explore prospects in defense, energy security, and housing — all significant priorities under Prime Minister Mark Carney’s administration as it navigates a turbulent trading relationship across the border, 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 community, which has historically favored Atco for its utility operations, is likely to change. The company’s infrastructure capabilities had been overshadowed while grouped with the power sector, she explained.
“We genuinely believe that this will unlock additional value for Atco’s businesses, and I expect to see a shift in ownership. Atco will be significantly smaller, thus it may not be an indexed stock for institutional investors,” Southern commented.
“We will need to provide substantial clarification and education regarding how the two entities will appear post-transaction.”
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As part of the agreement, Emera will purchase all outstanding shares of Canadian Utilities, valued at around $14.3 billion. Existing Emera shareholders are anticipated to hold approximately 60% of the newly formed utility, while former shareholders of Atco and Canadian Utilities are expected to own about 40%.
Shareholders of Emera, Canadian Utilities, and Atco will vote on the merger early next year. The deal is also contingent upon approvals from courts, regulators, competition authorities, and stock exchanges across multiple jurisdictions.
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