Its gas pipelines business unit centre will be in Houston, Texas, while Edmonton, Alberta will remain the business unit centre for liquids pipelines, with gas distribution continuing to be based in Ontario.
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Enbridge is about to get a whole lot bigger. The all-stock deal will create the largest pipeline and infrastructure company in North America, and the two companies said that they anticipated a 15% annualized dividend increase in 2017 following the merger. Ables Dorothy M retains 133,596 shares in the stock after this transaction.
Today, Canadian oil company Enbridge announced an agreement to purchase American gas company Spectra Energy for $28 billion.
The combined company brings together numerous highest quality energy infrastructure assets in North America: liquids and gas pipelines; US and Canadian midstream businesses; a regulated utility portfolio; and a growing renewable power generation business. Both companies stated that through the deal the emerging company will be both more stable and diverse. Currently, 70% of Enbridge’s earnings are derived from crude-oil operations.
“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”.
For Enbridge, creating new pipelines is becoming increasingly hard from the perspective of acquiring the necessary regulatory approvals as well as mounting construction costs. At the end of yesterday’s session, Enbridge’s shares jumped 5.05% to finish the trading session at $ 43.06.
Monaco will lead the combined company, which will be headquartered in Calgary. Post-2020, that figure almost doubles to $48 billion. “This transaction is transformational for both companies and results in unmatched scale, diversity and financial flexibility with multiple platforms for organic growth”.
If the deal closes as expected early next year, Spectra will add 140,800 kilometres of gas pipelines to bring Enbridge’s total gas lines to 165,600 kilometres, while Spectra will add only 2,720 kilometres of liquids pipelines to Enbridge’s existing 27,600 kilometres.
Your current subscription does not provide access to this content. Revenues hit $1.16B in the June 2016 quarter, which was below the consensus $1.26B projection. Yet, even though the carnage was widespread, not all energy-related businesses were equally affected. In Little Rock, Arkansas previous year, the company’s Texas Eastern pipeline ruptured, releasing 3.9 million cubic feet of gas, and then just this past April, that very same pipeline network exploded in Salem Township, Pennsylvania injuring one.
“Many parts of the USA are moving into natural gas as a way to get off of coal-fired power plants”. There are 12 equity research firms suggesting a Hold and 0 consider it Sell.
The firm also recently declared a quarterly dividend, which was paid on Friday, August 26th.
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Fool contributor Demetris Afxentiou has no position in any stocks mentioned. Energy Income Partners LLC now owns 4,330,919 shares of the company’s stock worth $208,404,000 after buying an additional 296,218 shares during the period. Analysts may have different stances on where they see the stock headed in the future.
