That places the deal at $40.33 (U.S.) per Spectra share, an 11.5 percent premium to Spectra’s closing price on Friday. The joint company will be called Enbridge inc.
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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. “This is an incredible opportunity for both companies and we at Spectra Energy could not be more excited about what it means going forward”.
If the deal is approved by shareholders, the merged entity will form the biggest energy infrastructure firm on the continent, with an eye-popping enterprise value of $165 billion. With combined secured projects in execution of C$26 billion (US$20 billion) and another C$48 billion (US$37 billion) of projects under development, the Transaction allows us to extend our anticipated 10-12 percent annual dividend growth through 2024.
Stass adds the move actually helps join Union Gas with a strong base of operations in Enbridge.
Jay Hatfield, chief executive officer of Infrastructure Capital Management LLC, said, “The environmentalists are out there, they’re powerful, and they’re trying to stop the natural gas pipelines”.
Greg Ebel, who will be the chairman of the new company noted: “Together, the merged companies will have what we believe is the finest platform for serving customers in every region of North America and providing investors with the opportunity for superior shareholder returns”.
Enbridge had been working with refiner Marathon Petroleum Corp.to build Sandpiper – a major pipeline out of the Bakken Shale formation.
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. The combined natural gas pipeline business will be operated out of Houston, while the liquids pipelines will be run out of Edmonton. The Enbridge natural gas distribution business to consumers would remain based in Ontario.
Enbridge has interests in almost 2 GW of net renewable and alternative generating capacity and continues to expand into wind, solar and geothermal power markets.
As The Wall Street Journal reports, diversification has become more important “as pipeline operators face the fallout of a prolonged rout in energy prices”.
Enbridge’s pipelines mainly send Canadian oil sands to refiners on the US Gulf Coast, while Spectra’s network ships natural gas to the US East Coast. Spectra also has 50% ownership of MLP DCP Midstream Partners (DPM).
Enbridge said in its statement that it expects to divest about $2 billion of noncore assets over the next 12 months.
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Once the merger of Spectra Energy and Enbridge is complete, there will be changes in leadership.
