The transaction is expected close in the first quarter of 2017 following shareholder and regulatory approvals in both Canada and the United States.
Advertisement
Spectra shareholders will own about 43 percent of the new company while Enbridge shareholders will own about 57 percent. Spectra Energy shareholders will gain shares of Enbridge valued at around $40.33 each (or a premium of about 11.5 percent) based on the closing price of Enbridge shares on Friday.
Enbridge Inc (Enbridge) is an energy transportation and distribution company.
Canadian pipeline operator Enbridge will buy U.S. rival Spectra Energy in a Can$37 billion (US$28 billion) deal that creates North America’s largest energy infrastructure firm, the companies announced Tuesday.
Following all these positive developments that will also create significant cost synergies, the joined entity will be in a position to provide 10% to 12% yearly dividend growth through 2024.
And the combined company would be able to support a large capital program, Ebel said. The consideration to be received by Spectra Energy shareholders is valued at U.S. $40.33 per Spectra Energy share. It will be led by Enbridge’s current president and CEO, Albert Monaco. Greg Ebel, president and CEO of Spectra, will be chairman of the new Enbridge once the merger is complete, expectedly early next year. Enbridge is set to take over 55% of British Columbia’s (BC’s) gas pipelines, some major gas processing plants and potential projects.
Algonquin Gas Transmission: It spans about 1,800 km and transports up to 2.74 billion cubic feet a day through New England, New York and New Jersey. And John Whelen is to be CFO.
“This combination brings together two highly complementary platforms to create North America’s largest energy infrastructure company”, Enbridge said in a statement. It owns and operates Canada’s largest natural gas distribution company in Ontario, Quebec, New Brunswick and New York State, and owns almost 2,000 megawatts of renewable power generating capacity. Canadian firm Enbridge is the operator of the longest oil and liquids transportation system of the world.
Enbridge is making a big bet on natural gas with the C$37-billion friendly takeover of Spectra Energy Corp., as it looks to grow while facing severe pushback on infrastructure projects.
He said more Canadian companies are also looking to the US, both because of the size of the market and because of Canada’s increasing regulatory hurdles.
Advertisement
Leading midstream energy companies Spectra Energy Corp.
