The combined company’s natural gas pipelines business would be based in Houston and its liquids pipelines business would be based in Edmonton. In 2006, Charlotte, North Carolina-based Duke purchased Cincinnati-based Cinergy Corp. According to a statement, the combination will create the largest energy infrastructure company in North America – making Enbridge less reliant on the Canadian oil sands for growth – and one of the largest globally based on a pro-forma enterprise value of approximately C$165 billion (US$127 billion).
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The combined company will be called Enbridge Inc. and keep its current headquarters in Calgary, Canada. 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. In terms of consideration, this worked out to $40.33 a share or 11.5 percent premium to the closing price of Spectra Energy on September 2.
Al Monaco, the chief executive of Enbridge stated: “Bringing Enbridge and Spectra Energy together makes strong strategic and financial sense, and the all-stock nature of the transaction provides shareholders of both companies with the opportunity to participate in the significant upside potential of the combined company”.
YATES SAYS YES: EOG Resources said it will buy oil and natural gas company Yates Petroleum for about $2.3 billion, mostly in stock.
Two pipeline companies agreed Tuesday to merge in a deal that could create the largest energy-infrastructure company in North America. The combined entity would also position Enbridge as the fourth largest company in Canada. The companies stated that the annual dividend growth of 10-to-12 percent is anticipated following through 2024. It operates in three areas of the natural gas industry: gathering and processing transmission and storage and distribution. Sponsored Investments includes the Company’s 33.7% economic interest in Enbridge Energy Partners L.P. (EEP) and Enbridge’s interests in both the Eastern Access and Lakehead System Mainline expansion projects held through Enbridge Energy Limited Partnership (EELP). The natural gas distribution business would remain based in Ontario. Enbridge employs almost 11,000 people, primarily in Canada and the United States. Over the next 12 months, Enbridge said it expects to divest about $2 billion of noncore assets.
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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.
