Since 1980, Canadian Utilities, which earns about 80 per cent of its profit in Alberta, has been controlled through a chain of holding companies by one Calgary family. On Tuesday that family agreed to give the control up.
Emera, the Halifax utility whose American operations are run from Tampa, Florida, and Canadian Utilities, the Calgary company behind ATCO Gas and ATCO Electric, announced an all-share combination they describe as a merger of equals. Emera will acquire all of Canadian Utilities' shares, valued at about C$14.3 billion, and all of the shares of its parent, ATCO, according to the joint announcement. The companies put the combined enterprise value at about C$72 billion and say it is expected to be the largest merger in history between two Canadian companies.
The chain of control
The structure being unwound is a stack of dual-class shares. ATCO holds about 37 per cent of Canadian Utilities' non-voting shares and all of its voting shares. Sentgraf Enterprises, the Southern family company, holds about 27 per cent of ATCO's non-voting shares and all of ATCO's voting shares. Through the voting shares, a family stake that is much smaller in economic terms has controlled Canadian Utilities.
After the deal, Canadian Utilities and ATCO non-voting shareholders will receive Emera voting common shares. Existing Emera shareholders are expected to own about 60 per cent of the combined company, and former ATCO and Canadian Utilities shareholders about 40 per cent. The combined company keeps the Emera name, its public headquarters in Halifax and its chief executive, Scott Balfour.
"I don't see us, from a strict utility perspective, being able to compete in a world where scale matters so much today," Nancy Southern, ATCO's chair and chief executive, said, according to The Canadian Press. ATCO, which stands for Alberta Trailer Company, was founded in 1947 by her grandfather and father and has held its investment in Canadian Utilities since 1980, the agency reported.
What the family keeps
The family is not leaving business. ATCO's other operations, including modular buildings, workforce housing, remote logistics for defence and government customers, a 40 per cent stake in Neltume Ports and a retail energy business, will be spun out as a new listed company called New ATCO. All of its voting shares will go to Sentgraf, and its non-voting shares to ATCO's existing non-voting holders. Ms Southern will be its chair and chief executive, and will also serve as co-chair of Emera's 13-member board, six of whose directors will be nominated by Canadian Utilities.
The businesses outside Canadian Utilities had about C$1.5 billion of revenue and C$173 million of adjusted earnings in 2025, Katie Patrick, ATCO's chief financial and investment officer, said on the call with analysts, according to MarketBeat. New ATCO is expected to start with more than C$700 million of cash and no corporate debt.
Each ATCO share will be exchanged for 0.865 of an Emera share and one New ATCO share. Canadian Utilities Class A holders other than ATCO get 0.755 of an Emera share, and Class B holders 0.819. The companies say Canadian Utilities Class A shareholders can expect about 20 per cent more dividend income.
Why the utilities want to be bigger
The case the companies make is about capital. The combined group plans to spend C$32 billion through 2030, supporting expected rate base growth of 7 to 8 per cent a year from about C$45 billion today. Emera earns about 70 per cent of its profit in Florida and Canadian Utilities about 80 per cent in Alberta. Together, about 80 per cent would come from Florida and Alberta, and about 95 per cent from regulated utilities. The equipment that utilities buy has also become a matter of federal policy.
Emera says it expects its investment grade credit ratings to be kept, and that the deal will add to adjusted earnings per share in the first full year after closing. "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," Mr Balfour said in the release. Ms Southern said he first approached her 15 months ago, The Canadian Press reported.
What it still needs
The family has committed in advance. Sentgraf has signed an agreement to vote all its ATCO shares in favour and against any competing proposal, and ATCO has done the same for its Canadian Utilities shares. Each company's directors and officers have also signed support agreements.
That does not settle the vote. The plan of arrangement needs two-thirds of the votes of several separate classes of ATCO and Canadian Utilities holders, a simple majority of Emera shareholders for the new share issue, approval from the Court of King's Bench of Alberta and regulators. It also needs a simple majority of Canadian Utilities Class A holders after excluding the votes that must be set aside under Multilateral Instrument 61-101, the Canadian rule that protects minority holders in transactions involving insiders. Shareholders are to vote early next year, and the companies expect to close in the third or fourth quarter of 2027.
The terms, exchange ratios, ownership split, enterprise value, rate base, capital plan, earnings mix, board composition, shareholdings, voting support agreements, approvals and timetable are from the joint press release issued by Emera, ATCO and Canadian Utilities on 6 October 2026 through Business Wire. Figures are in Canadian dollars. Nancy Southern's remarks, the history of ATCO and the date ATCO acquired its Canadian Utilities holding are as reported by The Canadian Press, published by Global News. The figures for New ATCO's revenue, earnings and opening cash, and Katie Patrick's remarks, are from the companies' conference call as reported by MarketBeat, published by Yahoo Finance. Accurate to 10am ET on 7 October 2026.
Topics businessmergers and acquisitionscanada
