After the transaction closes, Monaco will continue in that role, while Gregory L. Ebel, Spectra’s president and chief executive, will serve as nonexecutive chairman. The transaction values Spectra Energy approximately $28 billion based on Enbridge’s shares closing price on September 2.
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The combined entity will be a “world-class” North American energy infrastructure company, with Enbridge picking up key pipelines in the U.S. Northeast, Rob Thummel, managing director and portfolio manager at Tortoise Capital Advisors LLC, said in an email Tuesday.
Spectra Energy’s president and CEO Greg Ebel said: “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 Energy Corp. (NYSE:SE) opened trading today as $41.13 and is trading in the range of 39.41-41.15 today. The deal, which has a breakup fee of $1.36 billion, will close in the first quarter of 2017, pending regulatory approval.
Under the terms of the Transaction, Spectra Energy shareholders will receive 0.984 shares of the combined company for each share of Spectra Energy common stock they own.
Together, Enbridge and Spectra Energy bring $20 billion in secured capital and a $37 billion inventory of probability weighted projects in development.
Together, they operate almost 19,000 miles of pipelines moving oil and related liquids, and more than 100,000 miles of pipelines for natural gas. He will work closely with Paine & Partners to identify new investment opportunities in the sector and serve in a leadership role at attained companies.
Included in the transaction’s benefits to shareholders is an expected 15 percent annual dividend increase in 2017, an upturn from Enbridge’s previous aim of 10-to-12 percent. Enbridge is a dominant oil shipper in Canada with 27,000 kilometres of liquids pipelines. The Company also has involvement in natural gas gathering, transmission and midstream businesses. The Company owns and operates natural gas-related energy assets and a crude oil pipeline system connecting Canadian and the United States producers to refineries.
Houston-based Spectra, was formed in 2007 as a spin off of Charlotte, N.C. based Duke Energy’s natural gas business.
Enbridge said expects it would divest about $2 billion of noncore assets to provide additional financial flexibility.
Pipeline companies had traditionally been seen as an energy investment relatively immune from the price swings of the commodities they carry because they lock in long-term contracts.
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Stass adds the move actually helps join Union Gas with a strong base of operations in Enbridge.
