The check is in the pipeline

6 September 2016 By Kevin Allison

The Canada-based oil-pipeline group is buying Spectra Energy, a U.S. peer focused on natural gas. Expected cost cuts cover the 12 pct premium, while the all-stock structure limits debt and gives Spectra owners upside on projects to come. The question is whether that’s enough.

This content is for Subscribers only

Context News

Canada's Enbridge on Sept. 6 said it would buy Spectra Energy of the United States in an all-stock deal worth about $28 billion to create the biggest North American energy-infrastructure company.

Enbridge, Canada's biggest pipeline operator, said it would hand Houston-based Spectra shareholders 0.984 shares of the combined company for each Spectra share. Enbridge said the deal valued Spectra at $40.33 per share, a premium of about 11.5 percent, based on the companies' closing stock prices on Sept. 2.

The combined company will have an enterprise value of around $127 billion, according to the companies. They said they expect the deal to generate around $415 million of annual synergies by late 2018, plus an additional $200 million of tax savings starting in 2019.

Context News

Canada's Enbridge on Sept. 6 said it would buy Spectra Energy of the United States in an all-stock deal worth about $28 billion to create the biggest North American energy-infrastructure company.

Email a friend

Please complete the form below.

Required fields *