Emera (EMA) and Canadian Utilities (CU) announced a $72B merger of equals, with a 60/40 pro-forma ownership and a combined rate base of $45B post-close…

… largely concentrated in Florida (46%) and Alberta (33%), two regions with strong population dynamics and power demand. Together, management expects 7-8% annual rate base growth…

… which should support a 5-7% EPS CAGR through 2030 ($32B capital plan), 95% of which should come from regulated operations. Should the deal close in late 2027…

… we estimate it would value CU at ~14x EBITDA, so Emera is paying up - but our sense is that the resulting balance sheet scale will position the combined company well for Carney’s nation-building grid infrastructure agenda.

While the size of the deal is the headline, the ATCO (ACO-X) spin out could be the more interesting trade - given it’s focused on the structures and logistics business…

… which has tailwinds from modular housing, defence, and natural resource projects…

… that may not be fully reflected in shares today, given the move we’ve seen out of workforce accommodation names in recent years.

Add in $700M of cash and no debt post-close… let’s see what happens.

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