WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

Why Oil Prices Can’t Stay Low For Much Longer

Why Oil Prices Can’t Stay Low For Much Longer

Although investment in oil and…

Elon Musk’s Hyperloop Is Heading To India

Elon Musk’s Hyperloop Is Heading To India

President Modi of India has…

Enbridge, Spectra Ink A $28 Billion Merger Deal

NatGas installation

On Tuesday, Canadian pipeline company Enbridge agreed to the purchase of Spectra Energy Corporation out of Houston. The all stock deal is valued at $28 million. In the deal, Spectra Energy Holders will receive Enbridge shares valued at approximately $40.33 each.

When the deal is closed, Enbridge shareholders will own 57 percent of the company, while Spectra holders will have the remaining 43 percent. The new entity, bearing Enbridge’s name, will be a major energy infrastructure company that is being created when the industry continues to cope with low oil prices and the resulting conditions.

The company will have assets in crude oil, liquids and natural gas pipelines, terminal and midstream operations. The company will also have a regulated utility portfolio and renewable energy operations.

Al Monaco, the chief executive of Enbridge stated: “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.”

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.”

The deal is expected to close in the first quarter of 2017, according to a statement from Enbridge and Spectra.

Of note: in an interview with the Houston Business Journal in April, Ebel, who at the time was the CEO for Spectra, stated: “We have a history of being involved in M&A and consolidation, but we don’t need to do that because we have a $10 billion backlog of contracted projects that we’re building. You can build projects cheaper than you can buy new assets. In buying new assets, you’re usually buying assets that are revenue producing, and building assets takes several years to get it done, but we’ll be on the lookout.”

By Lincoln Brown for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News