Largest merger in Canadian history(1)

HIGHLIGHTS

   -- Emera and Canadian Utilities will combine in a merger of equals to form a 
      Top 20 North American utility, with approximately $72 billion in combined 
      enterprise value2, $45 billion in rate base3 and six million customers. 
 
   -- Creating a Canadian champion with greater financial strength, operating 
      capabilities and investment capacity, the combined company is expected to 
      benefit from improved credit rating thresholds, providing greater 
      financial flexibility to better support its customers and communities. 
 
   -- The combined company plans to execute on a $32 billion capital plan 
      through 2030, supporting expected average annual rate base growth of 7% 
      to 8%, while continuing to pursue investments in growth opportunities 
      driven by electrification, transmission, energy security and other major 
      energy infrastructure needs across Canada, the United States and 
      Australia. 
 
   -- Emera shareholders are expected to own approximately 60% of a 
      substantially larger and more diversified company, with the transaction 
      expected to be accretive to adjusted EPS in the first full year following 
      closing, enhancing the combined company's credit profile and supporting 
      long-term earnings and dividend growth. 
 
   -- Canadian Utilities' shareholders will receive approximately 40% ownership 
      in the $72 billion larger combined company, while benefiting from an 
      approximately 20% expected increase in dividend income.4 
 
   -- Both Canadian Utilities and Emera will benefit from greater geographic 
      and regulatory diversification, enhanced financial flexibility and 
      continued exposure to two of the fastest growth jurisdictions in North 
      America -- Florida and Alberta. 
 
   -- The combined company will operate as Emera and maintain its public 
      company headquarters in Halifax and Canadian Utilities' corporate and 
      operational headquarters in Calgary, Edmonton and Perth, Australia. Emera 
      CEO, Scott Balfour, will serve as CEO of the combined company and 
      Canadian Utilities Executive Chair, Nancy Southern, will serve as 
      Co-Chair of the Board with current Chair, Karen Sheriff. 
 
   -- In connection with the transaction, ATCO will spin off into a new 
      publicly-traded industrial services leader made up of housing, defence 
      and investments, including ports and retail energy.  ATCO Chair and CEO, 
      Nancy Southern, will serve as Chair and CEO of the new entity. 
 
   -- ATCO shareholders will receive an interest in both the combined energy 
      company, Emera and the purpose-built New ATCO with dedicated leadership, 
      capital and strategic focus in both companies. 
 
   -- ATCO's controlling shareholder, Sentgraf Enterprises Ltd., has signed a 
      voting support agreement to support the transaction. 
 
   -- The transaction was approved following comprehensive reviews by all three 
      Boards, including independent Special Committees for ATCO and Canadian 
      Utilities, supported by independent financial and legal advice. 
 
_____________________________________ 
(1) Based on an implied enterprise value of Canadian 
 Utilities of $28 billion. 
(2) Enterprise value is calculated as total pro forma 
 market capitalization of the combined company plus 
 net debt and preferred shares. 
(3) Represents 2025A mid-year rate base for Canadian 
 Utilities and year-end for Emera. 
(4) Represents dividend accretion for Canadian Utilities 
 Class A shareholders. The amount and timing of any 
 dividends will be at the discretion of the board of 
 directors of Emera following the completion of the 
 transaction. 
 

HALIFAX, NS and CALGARY, AB, Oct. 6, 2026 /CNW/ -- Emera, ATCO and Canadian Utilities today announced a definitive agreement to bring together Emera and Canadian Utilities in a merger of equals, creating a Canadian utility and energy infrastructure powerhouse with the scale to help power Canada's growth ambitions, while continuing to invest in and grow its operations across its jurisdictions, including in the high growth markets of Alberta and Florida.

The combined company is expected to have a pro forma enterprise value of approximately $72 billion, approximately $45 billion in rate base and serve approximately six million customers across Canada, the United States and international markets. It will have greater financial strength, broader capabilities, and enhanced investment capacity to support expected growing energy and infrastructure needs across its operations. This increased scale will position the company to support a range of capital-intensive priorities, electrification projects, major natural gas and electric transmission investments, large load customers, export infrastructure and other large-scale energy infrastructure projects.

The new company will operate as Emera. Its public company headquarters will remain in Halifax, while maintaining Canadian Utilities' corporate and operational headquarters in Calgary and Edmonton, with a strong continued presence in Canadian Utilities' key markets including Perth, Australia. Emera's U.S. operations will continue to be headquartered in Tampa, Florida.

Based on the implied enterprise value of Canadian Utilities, the transaction is expected to be the largest merger in history between two Canadian companies and will form a Top 20 North American utility.

Customers can expect continued safe and reliable service throughout the transaction process and beyond. Until closing, Emera, ATCO and Canadian Utilities will continue to operate independently and remain focused on customers, employees, safety, reliability and operational performance. The combination is expected to support continued investment in infrastructure, employment, economic development, and long-standing community partnerships.

In connection with the transaction, ATCO will spin off into a high-growth industrial services company focused on housing, defence, and investments, including ports and retail energy, into a new publicly-traded company, New ATCO, with a clear growth agenda and distinct investor proposition.

Terms of Agreement

Under the terms of the arrangement agreement, Emera will acquire all the issued and outstanding shares of Canadian Utilities and ATCO, and the transaction will be structured such that ATCO's industrial services business will be spun-out as New ATCO. Emera will acquire all of the issued and outstanding shares of Canadian Utilities and ATCO for the following consideration:

   -- Canadian Utilities Class A shareholders, other than ATCO, will receive 
      0.755x of an Emera common share for each Canadian Utilities Class A share 
      held; 
 
   -- Canadian Utilities Class B shareholders, other than ATCO, will receive 
      0.819x of an Emera common share for each Canadian Utilities Class B share 
      held; 
 
   -- ATCO Class I and Class II shareholders will receive 0.865x of an Emera 
      common share for each Class I or Class II share held.  This exchange 
      ratio reflects (i) the same 0.755x exchange ratio for the Canadian 
      Utilities Class A shares held by ATCO; and (ii) the same 0.819x exchange 
      ratio for the Canadian Utilities Class B shares held by ATCO, as adjusted 
      for certain liabilities assumed by Emera and the value of certain Emera 
      shares that will be issued to New ATCO as part of the spinoff 
      transaction. 
 
   -- In addition to the Emera shares, ATCO shareholders will also receive one 
      New ATCO Class I share for each ATCO Class I share held and one New ATCO 
      Class II share for each ATCO Class II share held. All of the voting 
      shares of New ATCO will be distributed to ATCO's sole Class II voting 
      shareholder, Sentgraf, while the non-voting shares of New ATCO will be 
      distributed to existing ATCO Class I non-voting shareholders on a pro 
      rata basis. 

Building a Canadian-headquartered energy and infrastructure powerhouse

Demand for safe, reliable and resilient energy infrastructure is accelerating across North America. The combination of Emera and Canadian Utilities will create a larger, more diversified company with the financial capacity, operating expertise and market access to pursue larger and more complex opportunities. Together, the companies are expected to be even better positioned to invest, execute, and compete than either is today.

The combination of Emera, with approximately 70% of earnings from operations in Florida, and Canadian Utilities with approximately 80% from operations in Alberta, creates a company with approximately 95% of earnings from regulated utilities, and approximately 80% of earnings generated in Florida and Alberta, two of the highest growth jurisdictions in North America.

Leadership perspectives

"Today marks an important moment for our companies and the customers and communities we serve," said Scott Balfour, President and Chief Executive Officer of Emera. "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. As demand rises from electrification trends and major infrastructure development, the combined company will be better positioned to help meet growing energy needs and power Canada's growth ambitions. Our shared commitment to safety, employees, customers and communities will guide us as we bring our organizations together."