The consideration Spectra shareholders receive is valued at $40.33 per Spectra share, based on the closing price of Enbridge common on September 2, a roughly 11.5% premium to the closing price of Spectra common on September 2.
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The combined company’s asset base will include oil and gas pipelines, a regulated utility portfolio and renewable power generation.
Enbridge’s biggest-ever deal comes as the company has been steadily expanding its North American pipeline network, which carries the bulk of Canadian crude oil to the United States.
“Bringing Enbridge and Spectra Energy together makes strong strategic and financial sense, and the all-stock nature of the transaction provides shareholders of both companies with the opportunity to participate in the significant upside potential of the combined company”, Monaco said of the transaction.
Enbridge’s Al Monaco would remain president and chief executive officer of the enlarged company and Spectra’s CEO, Greg Ebel, would become chairman of the Enbridge board of directors after the deal gets necessary approvals.
The companies’ master limited partnerships, Spectra Energy Partners (SEP) and Enbridge Energy Partners (EEP) will continue to be separate publicly traded companies, headquartered in Houston, according to the release. The new company will be called Enbridge Inc.
The companies expect the transaction to be completed in the first quarter. This is an incredible opportunity for both companies and we at Spectra Energy could not be more excited about what it means going forward.
The combined company brings together numerous highest quality energy infrastructure assets in North America: liquids and gas pipelines; USA and Canadian midstream businesses; a regulated utility portfolio; and a growing renewable power generation business.
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Shares of Spectra Energy (SE) were up more than 6% in premarket trading Monday to $38.52.
