At the October 15, 2026 close, one Canadian Utilities Class A share was worth C$50.43 in Emera stock under the deal (0.755 × C$66.79) but traded at C$49.48, a spread of 1.91%. Each ATCO share's 0.865 Emera shares were worth C$57.77, which leaves an implied C$22.46 for the New ATCO spin-off share. On today's dividends, a Canadian Utilities holder's income would rise about 21% and an ATCO holder's about 23%. Every figure below comes from Financial Modeling Prep market data, October 15, 2026 close, or from the October 6, 2026 Emera, ATCO and Canadian Utilities announcement. The arithmetic is shown so you can redo it with tomorrow's prices. For the list of votes and regulators the deal still has to clear, see our guide to the Emera merger approvals.

The three numbers that set the deal

According to the release, non-ATCO holders of Canadian Utilities ($CU.TO) Class A shares receive 0.755 of an Emera common share for each share, and Class B holders receive 0.819. Holders of ATCO ($ACO-X.TO) Class I or Class II shares receive 0.865 of an Emera share plus one share of New ATCO, the spin-off that keeps ATCO's housing, defence and investment businesses, including ports and retail energy. The release says ATCO's 0.865 ratio is built from the same 0.755 and 0.819 ratios applied to the Canadian Utilities shares ATCO owns, "as adjusted for certain liabilities assumed by Emera" and for the Emera shares to be issued to New ATCO. No fractional Emera shares will be issued, and Canadian Utilities preferred shares stay outstanding.

Is the ratio fixed? The release states the consideration as a set number of Emera shares per share and describes no collar or other price protection. In practice, the number of Emera shares you would receive does not change with the market, but their dollar value moves every day with Emera ($EMA.TO, NYSE: EMA). The release does not use the word "fixed", so read the joint management information circular the companies will prepare for the special meetings expected in early 2027.

Canadian Utilities: the arbitrage spread, day by day

The spread is the gap between what the deal would pay and what the target trades for: (0.755 × Emera price − CU price) ÷ CU price. At the October 15 close: 0.755 × C$66.79 = C$50.43; C$50.43 − C$49.48 = C$0.95; C$0.95 ÷ C$49.48 = 1.91%.

For the first four sessions after the announcement, Canadian Utilities traded at or slightly above the value of the Emera shares it would become, a negative spread. From October 13 the spread turned positive and widened to almost 2%. A positive spread is the usual pattern: the market charging for time and for the risk that approvals fail.

Part of that 1.91% is not risk at all, just dividends. Until closing, one CU share pays C$0.4623 a quarter, while 0.755 Emera shares would pay 0.755 × C$0.74 = C$0.5587. Over four quarters, if both rates held, that is a gap of 4 × (C$0.5587 − C$0.4623) = C$0.39, about 0.78% of the CU price. An arbitrageur who buys CU and sells Emera short pays that gap. The release expects closing in the third or fourth quarter of 2027, so the gap is a real cost.

ATCO: what the market implies for New ATCO

ATCO holders get two things, so the market price of one ATCO Class I share has to cover both. Take the Emera portion out and what is left is the price the market is implicitly putting on one New ATCO share. At the October 15 close: 0.865 × C$66.79 = C$57.77; C$80.23 − C$57.77 = C$22.46.

This is an implied number, not a valuation. It assumes the deal closes on its terms, ignores the time to closing, and absorbs every pricing error in either stock. It has moved too: C$23.66 at the October 6 close, C$25.37 on October 7, C$21.37 on October 14. New ATCO has not traded yet, and the release does not say where it will list.

Dividend income: checking the "about 20%" claim

The release says Canadian Utilities shareholders should get "an approximately 20% expected increase in dividend income", and a footnote says the figure is for Class A holders. It also says, in a footnote, that "the amount and timing of any dividends will be at the discretion of the board of directors of Emera" after closing. Nothing below is a promise.

• Canadian Utilities Class A: today 4 × C$0.4623 = C$1.8492 a year. After the exchange, 0.755 × (4 × C$0.74) = C$2.2348. Increase: C$2.2348 ÷ C$1.8492 − 1 = 20.9%.
• Same calculation at Emera's previous C$0.7325 quarterly rate: 0.755 × C$2.93 = C$2.2122, an increase of 19.6%. That is the "about 20%" in the release; the October 13 raise to C$0.74 (payable November 13, 2026) adds roughly a point.
• ATCO Class I: today 4 × C$0.52 = C$2.08 a year. After the exchange, 0.865 × C$2.96 = C$2.5604, an increase of 23.1%, before any dividend New ATCO might pay. The release gives no dividend figure for ATCO holders.

On October 15 prices, the yields are 4.43% for Emera (C$2.96 ÷ C$66.79), 3.74% for Canadian Utilities and 2.59% for ATCO. Higher income does not mean higher total value. It means more of the value comes back as cash.

Worked example: 100 Canadian Utilities Class A shares

1. Shares received: 100 × 0.755 = 75.5 Emera shares. No fractional shares are issued; check the circular for how the half-share is settled.
2. Market value today: 100 CU shares at C$49.48 = C$4,948.00. 75.5 Emera shares at C$66.79 = C$5,042.65. The C$94.65 difference is the spread.
3. Annual dividends today: 100 × C$1.8492 = C$184.92.
4. Annual dividends after closing, at the current Emera rate: 75.5 × C$2.96 = C$223.48 (C$222.00 on 75 whole shares), about C$38.56 more a year.
5. What can change: Emera's price, Emera's dividend policy, and whether the deal closes at all.

How the three stocks have moved since the announcement

From the October 5 close, the last before the announcement, to October 15: Emera fell 2.21% (C$68.30 to C$66.79), Canadian Utilities fell 3.36% (C$51.20 to C$49.48), and ATCO rose 8.16% (C$74.18 to C$80.23). In the October 6 session alone, ATCO jumped from C$74.18 to C$81.02. Because Canadian Utilities is now priced off Emera, its fall mostly follows Emera's; the extra 1.15 points is the spread opening up. ATCO's gain is the market's verdict on the 0.865 ratio plus the spin-off.

Common mistakes

• Treating the spread as free money. The 1.91% is paid only if the deal closes, and only after a wait of a year or more. If any of the eight shareholder approvals or a required regulatory approval fails, Canadian Utilities goes back to trading on its own, and there is no guarantee that price is above today's. Our review of past utility merger timelines shows how long these approvals have taken and how one cross-border deal was turned down.
• Mixing currencies. Emera also trades on the NYSE, at US$47.07 on October 15. A US investor who computes 0.755 × US$47.07 = US$35.54 and compares it with the C$49.48 Canadian Utilities price is comparing dollars with dollars that are not the same. Use the Toronto prices for both, or convert both. The two Emera quotes together imply about US$0.705 per Canadian dollar (47.07 ÷ 66.79), and that rate moves too.
• Assuming the tax answer. The release does not discuss tax treatment, including any tax-deferred rollover. Do not assume the exchange is tax-free in Canada or the US until the circular says so, and ask your adviser how it applies to your account type.

A short checklist before acting on the math

• Recompute the spread with current Toronto closes, not the numbers above.
• Subtract the dividend gap for the months you expect to wait.
• Read the circular for fractional-share, tax and election terms.
• Decide whether you would own Emera at today's price. That is what you are buying.

Background on the original announcement is in our report on the C$14.3 billion all-stock merger. We follow the filings in the Markets section and on the Wall Street Conservative front page. This is not investment advice.

FAQ

What is the Emera exchange ratio for Canadian Utilities shares?

0.755 Emera shares per Class A share and 0.819 per Class B share, for holders other than ATCO, according to the October 6, 2026 release.

What is the arbitrage spread on Canadian Utilities right now?

1.91% at the October 15, 2026 close: 0.755 × C$66.79 = C$50.43 against a CU price of C$49.48. It was negative for the first four sessions after the announcement.

How much is the New ATCO spin-off worth?

There is no market price yet. ATCO's price minus 0.865 Emera shares implies about C$22.46 per share at the October 15 close. That is an implied figure, not a valuation.

Will Canadian Utilities holders really get a 20% dividend increase?

At Emera's current C$0.74 quarterly rate the increase works out to about 20.9%. After closing, dividends are at the Emera board's discretion.