In detail, shareholders of Spectra Energy will get 0.984 shares of the combined entity – in which Enbridge will have a 57% ownership and Spectra Energy will have the remaining 43% interest – for every common stock they hold.
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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.
Enbridge’s ACFFO (available cash flow from operations) per share is expected to increase at a 12%-14% CAGR (compound annual growth rate) from 2014 to 2019.
The combined body would have a pro-forma enterprise worth $165-billion and a diversified asset base including crude oil, natural gas pipelines and liquids, terminal and midstream operations, regulated utilities and renewable energy. Greg Ebel, the CEO of SE, will become the Chairman of Enbridge’s Board of Directors.
Enbridge Chief Executive Al Monaco will lead the combined company, which will have its headquarters in Calgary. Once the deal is successfully closed, Enbridge will list its shares on the New York Stock Exchange (NYSE) and Toronto Stock Exchange, while Spectra Energy will be delisted from the NYSE.
Spectra Energy’s (SE) stock rating was reduced to “neutral” from “buy” at Goldman Sachs in a note received on Thursday.
The merger is expected to close in Q1 of 2017, following shareholder and regulatory approvals, as well as other customary conditions. The company would have “first and last mile connectivity to key supply basins and demand markets”, Enbridge and Spectra said Tuesday. Notably the company serves key markets in the eastern United States, including NY and Miami, where Enbridge has no presence. He writes articles for Analysis of different Companies including news and analyst rating updates.
“What we have here is a tremendous menu of options”, he said, adding the combined company could invest in natural gas pipeline projects in various parts of the USA, in offshore wind, or in utilities, among others.
According to the terms of the agreement announced on Tuesday require Spectra shareholders to be paid 0.984 shares of the combined company for each Spectra share.
The takeover, the most important energy accord since oil and natural gas prices crashed in mid-2014, highlights how pipeline companies are under pressure to merge as they grapple with overcapacity and sliding tariffs that have slowed dividend growth and unnerved investors.
Enbridge said expects it would divest about $2 billion of noncore assets to provide additional financial flexibility.
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Enbridge Energy Partners LP and Spectra Energy Partners are expected to continue to be publicly traded partnerships headquartered in Houston.
