ATCO (ACO-X) M&A announcement summary

Deal rationale and strategic fit

• Proposed merger combines complementary regulated utility operations and creates two focused investment platforms: a larger utility and a standalone housing, defence and industrial-services business.

• Greater scale, financial capacity and operating expertise are intended to support major energy infrastructure investment as demand rises from electrification, transmission, data centres and large-load customers.

• The standalone platform would focus on modular housing, defence and northern operations, plus real-asset investments in ports, logistics, real estate and retail energy.

Financial terms and conditions

• Canadian Utilities Class A and Class B holders are to receive 0.755 and 0.819 Emera shares per share, respectively; Class I/II holders are to receive 0.865 Emera share and one spin-off share per share held.

• Emera shareholders are expected to own ~60% and former Canadian Utilities and industrial-services shareholders ~40% of the combined utility; its expected enterprise value is ~$72B, rate base ~$45B and customer base ~6M.

• Canadian Utilities Class A shareholders are expected to receive ~20% higher dividend income through Emera; any standalone dividend is subject to board approval, and Emera dividends remain at its board’s discretion.

• The spin-off is expected to have more than CAD 700M cash and no corporate debt at separation; standalone 2025 revenue was ~CAD 1.5B and adjusted earnings CAD 173M.

• The combined utility’s $32B capital plan through 2030 is expected to support average annual rate-base growth of 7%–8%.

Integration plans and timeline

• The combined utility will operate as Emera, retain its public-company headquarters in Halifax, and maintain Canadian Utilities headquarters in Calgary and Edmonton; Scott Balfour will be CEO, with Nancy Southern and Karen Sheriff as Co-Chairs.

• The industrial-services spin-off will be headquartered in Calgary, with Nancy Southern as Chair and CEO; its businesses include ATCO Structures, ATCO Frontec and investments such as Neltume Ports, ATCO Land and Development, and ATCO Energy.

• Closing is expected in Q3 or Q4 2027; securityholder meetings are expected in early 2027, with the businesses operating independently until completion.

• At closing, shareowners are expected to hold two separately investable positions: the combined utility and the continuing standalone platform.