Enbridge/Spectra Energy join forces to create global energy infrastructure leader

BY Fraser Tennant

In a combination that will create a “true North American and global energy infrastructure leader”, Enbridge and Spectra Energy are to join forces in a deal with an enterprise value of C$37bn (US$28bn). 

Under the terms of the definitive merger agreement, which creates the largest energy infrastructure company in North America and one of the largest globally, Spectra Energy shareholders will receive 0.984 shares of the combined company for each share of Spectra Energy common stock they own.

The combined company will control a diverse set of best-in-class assets comprised of crude oil, liquids and natural gas pipelines, terminal and midstream operations, a regulated utility portfolio and renewable power generation.

“Over the last two years, we’ve been focused on identifying opportunities that would extend and diversify our asset base and sources of growth beyond 2019,” said Al Monaco, president and chief executive of Enbridge Inc. “We are accomplishing that goal by combining with the premier natural gas infrastructure company to create a true North American and global energy infrastructure leader.  This transaction is transformational for both companies and results in unmatched scale, diversity and financial flexibility with multiple platforms for organic growth.”

The combined company will be called Enbridge Inc.

“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," said Greg Ebel, president and chief executive of Spectra Energy, who will become chairman of Enbridge following the closing of the transaction.

He added: “This is an incredible opportunity for both companies and we at Spectra Energy could not be more excited about what it means going forward. Together, the merged company 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.”

The Enbridge/Spectra Energy transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the first quarter of 2017 - subject to shareholder and certain regulatory approvals, as well as other customary conditions.

Mr Monaco concluded: “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.”

News: Enbridge buying Spectra in $28 billion deal

©2001-2016 Financier Worldwide Ltd. All rights reserved.