CALGARY, A.B. – Calgary-based Enbridge Inc. has announced this morning that it plans to buy Houston-based Spectra Energy Corp. for stock worth $37 billion.
The combination of the two pipeline companies would create a North American energy infrastructure giant, to be called Enbridge Inc. and headquartered in Calgary.
The combined company’s natural gas pipelines business would be based in Houston, while its liquids pipeline business would be based in Edmonton.
The companies say they expect to achieve operational savings worth about $540 million on an annualized basis, most of it achieved in the latter part of 2018. They also expect an additional $260 million of tax savings beginning in 2019.
Under the proposed deal, shareholders of Enbridge would own about 57 per cent of the combined company, with the rest owned by Spectra shareholders.
They expect the combined company will pay higher dividends, including a 15 per cent increase on current levels in 2017 after the deal closes.
Spectra, which operates in both Canada and the United States, has 33,796 kilometers of natural gas and crude oil pipelines and about 300 billion cubic feet of natural gas storage and 4.8 million barrels of crude oil storage.
Last month, Enbridge acquired a minority stake in the Bakken Pipeline system through a joint venture.
It also won the auction for a stake in EnBW’s Hohe See, one of Europe’s largest offshore wind power projects, Reuters reported, citing a source familiar with the matter.