08 Sep Enbridge to buy Spectra Energy in $28b deal
Canadian pipeline operator Enbridge Inc. (TSX:ENB) has finalised a deal to buy Houston-based Spectra Energy Corp (NYSE:SE) for US$28 billion to create North America’s largest energy infrastructure company.
The takeover is the most notable energy deal since oil and natural gas prices crash in mid-2014.
Enbridge chief executive Al Monaco, who will takeover as president and CEO of the combined company said the deal is an “extension of the runway” for both firms.
“Now is the time to really be thinking about how to position for the future, when you are strong rather than in a position of weakness,” he said.
The deal offers a way of adding to their networks once growth in building expensive new pipelines has slowed.
Enbridge shareholders will own 57% of the new company and Spectra shareholders will retain 43%.
The total combined revenue of the two companies is estimated at $40 billion, with earnings before interest and taxes of $5.8 billion.
Spectra has various pipelines in Northeast British Columbia, including the Pine River Gas plant, which has been shut down since June due to flooding.
Prior to its closing, it was producing 245 million ft3 per day of natural gas.