Emera Inc. has reached an agreement to buy Teco Energy Inc. for $6.5 billion in cash, a major move that will give the Canadian utility $20 billion in assets and more than 2.4 million electric and gas customers.

Halifax, Nova Scotia-based Emera is offering Teco's shareholders $27.55 a share, a 48% premium to Teco's closing stock price on July 15, the day before Teco announced it was exploring strategic options, including a possible sale. Including the assumption of debt, Emera valued the deal at $10.4 billion.

The deal, expected to close in mid-2016, is seen adding to Emera's profit in the first full of year of operations. The company projects the deal would boost profit by at least 10% by the third year.

Teco Energy, Tampa Electric and Peoples Gas headquarters would remain in Tampa, Fla., and New Mexico Gas Co. headquarters would remain in Albuquerque, N.M.

Teco shares, up 2.8% this year, surged 28% in late trading to $27.

Write to Carolyn King at carolyn.m.king@wsj.com and Maria Armental at maria.armental@wsj.com

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(END) Dow Jones Newswires

September 04, 2015 17:55 ET (21:55 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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