18 Mar TransCanada to purchase Columbia Pipeline Group
TransCanada (TSX:TRP) announced it will buy Columbia Pipeline Group (NYSE:CPPL) for US$.10.2 billion.
The deal will create one of North America’s largest regulated natural gas transmission companies.
The $13 billion acquisition, including debt comes after US President Barack Obama put a stop to the XL Keystone crude pipeline. After a seven-year battle for acceptance, his conclusion was a success for environmentalists and big loss for TransCanada.
Columbia Pipeline maintains and manages around 15,000 miles of natural gas pipelines attaching the US Gulf Coast to the Midwest, Mid-Atlantic and Northeast United States, which holds some of the country’s shale gas.
The pipeline will join TransCanada’s current assets to make a 5,700 mile network.
Russ Girling, TransCanada’s CEO, said, “This acquisition represents a rare opportunity to invest in an extensive competitively positioned growing network of regulated natural gas pipeline and storage assets in the Marcellus and Utica regions of the United States.”
The purchase will allow TransCanada an integrated portfolio of secured growth projects worth $17.72 billion. It will sell its Northeast merchant power assets to finance the deal and sell its interest in its Mexican natural gas pipeline obligation.