Enbridge and Spectra Energy on Tuesday entered into a merger agreement in a US$ 28 billion stock-for-stock transaction creating the largest energy infrastructure company in North America.
Boards of directors of both companies have unanimously approved the transaction which is expected to close in the first quarter of 2017, subject to shareholders and regulatory approvals, a joint statement reads.
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, valued at $40.33 per Spectra Energy share.
Upon completion of the transaction, Enbridge shareholders are expected to own approximately 57 percent of the combined company and Spectra Energy shareholders are expected to own approximately 43 percent of the joint company called Enbridge.
The joint company will be headquartered in Calgary with Al Monaco serving as the company’s president and CEO.
Enbridge operates crude oil and liquids transportation systems across Canada and the U.S. and is involved in natural gas gathering, transmission and midstream business, while Spectra Energy’s operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines, natural gas storage, crude oil storage as well as natural gas gathering, processing, and local distribution operations.
With the merger, Enbridge will take over Spectra Energy’s stake in the proposed Westcoast Connector Gas Transmission pipeline, planned to transport natural gas to the Prince Rupert LNG liquefaction and export facility on the southwest side of Ridley Island, near Prince Rupert.