(SE) in a $28 billion stock-for-stock transaction that will create the largest energy pipeline and storage company in North America, the companies said in a statement Tuesday. The combination will create the leading energy infrastructure company in North America and one of the leading globally based on a pro-forma enterprise value of about C$165 billion (US$127 billion).
Advertisement
Spectra shareholders will get 0.984 shares of the combined company for each share they own, valued at about $40.33 a share, based on share prices on September 2. ENB CEO Al Monaco will continue to lead the company. Moreover, the merger will combine two secured giant projects worth $20 billion and $37 billion that are under development.
According to Zacks Investment Research, “Enbridge Inc., a Canadian company, is a leader in energy transportation and distribution in North America and internationally”. Enbridge Inc (USA) was Initiated by BofA/Merrill to “Neutral” on Sep 1, 2016. Upon completion of the Transaction, Enbridge shareholders are predictable to own about 57 percent of the combined firm and Spectra Energy shareholders are predictable to own about 43 percent.
Monaco said the companies will need to see what divestitures may be required by competition authorities, but he doesn’t see much overlap between Spectra Energy’s natural gas infrastructure business and Enbridge’s oil and liquids operations.
Many analysts are providing their Estimated Earnings analysis for Spectra Energy Corp and for the current quarter 10 analysts have projected that the stock could give an Average Earnings estimate of $0.28/share.
Spectra holds a majority stake in the Maritimes & Northeast pipeline, a small part of a sprawling system that transports gas throughout the USA northeast and south along the Atlantic seaboard.
The companies are expecting to save about $415 million in costs, most of which will be achieved toward the end of 2018. On the renewables front, Enbridge is invested in wind, solar and geothermal power assets. Liquids Pipelines segment owns and operates crude oil and other liquid hydrocarbons pipelines and terminals. Spectra Energy Partners LP makes up approx 0.10% of Fort Washington Investment Advisors Inc Oh’s portfolio.Jackson Wealth Management boosted its stake in SEP in the latest quarter, The investment management firm added 1,020 additional shares and now holds a total of 71,198 shares of Spectra Energy Partners LP which is valued at $3,449,543. Spectra also has 50% ownership of MLP DCP Midstream Partners (DPM). Enbridge also said it planned to divest about $2 billion of non-core assets over the next year. Under the announced deal, less than half of the combined company’s earnings are expected to come from crude operations.
After the deal closes, Enbridge’s head office will remain in Calgary.
Advertisement
The company’s operations in the USA and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations.
