“The combination of Enbridge and Spectra Energy creates what we believe will be the best, most diversified energy infrastructure company in North America, if not the world”, Spectra President and CEO Greg Ebel said in a statement.
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Houston-based Spectra is in a joint-venture project with Detroit-based DTE Energy Co. to create the Nexus pipeline, a $2 billion project that will pipe natural gas sourced from Appalachian fracking fields in OH and Pennsylvania and will include 55 miles in Monroe, Washtenaw and Lenawee counties. In 2006, Charlotte, North Carolina-based Duke purchased Cincinnati-based Cinergy Corp. This is equivalent to $40.33 per share, representing a premium of about 11.5 percent to Spectra’s closing price on Friday. After the deal is completed, Enbridge shareholders are expected to have ownership of about 57% of the combined entity while the rest will be owned by Spectra Energy shareholders. Despite having risen some 50 percent since January on a partial recovery in oil and gas prices, Spectra’s shares are still down 16 percent from a high of $43 hit in July 2014.
Enbridge’s share price closed up $2.05 or 3.9 per cent at $55.30 on the TSX, while Spectra’s share price closed up US$4.85 or 13.4 per cent to US$41 on the NYSE.
A large diameter pipeline construction by Houston-based pipeline company Spectra Energy. Spectra Energy said the 24-inch pipeline, which crossed the river about a mile east of the Interstate 30 bridge between Little Rock and North Little Rock, was damaged by river flooding.
The merger combines a diverse set of assets, including crude oil, natural gas pipelines, midstream operations, a regulated utility portfolio, and renewable power generation.
Enbridge Inc (USA) (NYSE:ENB) have shown a low EPS growth of -15.30% in the last 5 years and has earnings growth of -51.60% yoy. A map of the combined companies’ infrastructure shows the deal would expand Enbridge’s reach in the Western Plains, Rocky Mountains, Appalachia, and the Northeast.
Two pipeline companies agreed Tuesday to merge in a deal that could create the largest energy-infrastructure company in North America.
Monaco will serve as the president and chief executive officer of the new company. Then, the company expects an annual 10%-12% dividend growth through 2024.
“Now is the time to really be thinking of positioning for the future”, Monaco said.
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The company’s operations in the United States 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. BMO Capital Markets and Citi acted as financial advisers for Spectra while Wachtell, Lipton Rosen & Katz and Goodmans LLP provided legal advice.
