Emera bids for national powerhouse with $35-billion Canadian Utilities, ATCO merger — SkimNews
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- Emera announced a friendly all-stock offer valued at $14.3 billion for ATCO and Canadian Utilities, with a combined enterprise value of $72 billion that the three companies said ranks as one of the largest mergers in Canadian history.
- Under the terms, Emera shareholders would own 60% of the combined company and ATCO/Canadian Utilities holders 40%, with the transaction expected to close by the end of 2027 and the merged company planning $32 billion in growth investments over four years.
- Fitch Ratings placed Canadian Utilities and ATCO investment-grade ratings on 'negative watch' on Tuesday, warning borrowing costs could rise, while Canadian Utilities shareholders would see a 20% dividend increase if the deal closes.
- Emera shares fell 2.9% to $66.31 on the TSX while ATCO jumped 9% to $81.02 and Canadian Utilities declined 1.9% to $50.22 on the announcement, suggesting investors see ATCO holders as the bigger winners.
- Emera plans to spin out ATCO's housing, defence and ports businesses into a new publicly listed company still called ATCO, to be led by Nancy Southern and controlled by her family holding company Sentgraf Enterprises.
- Sentgraf would own roughly 7% of the merged Emera — a stake worth more than $2 billion — making the Southern family one of the utility's largest institutional investors after a 15-month negotiation code-named 'Project Maple.'
- CEO Scott Balfour said PM Mark Carney's campaign to attract up to $1 trillion in infrastructure investment encouraged the deal, and the two CEOs first discussed merging at the Calgary Stampede in 2025.
Why it matters: ATCO's 9% stock jump versus Emera's 2.9% drop tells the market the Southern family won the negotiation. Fitch's negative watch on both targets' investment-grade ratings — which could raise their borrowing costs — is the buried financial risk in a deal the companies are framing as a national-champion project.
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