Canadian pipeline operator Enbridge Inc. has agreed to buy Houston-based Spectra Energy Corp. in a US$28 billion deal that will create the largest North American energy infrastructure company.
Under the terms of the all-stock deal, Spectra shareholders will get 0.984 shares of the combined company for each share held.
This is equal to US$40.33 per share, representing a premium of about 11.5 percent to Spectra’s closing price on Friday, Reuters reports.
Enbridge will issue about 694 million new shares and take on about US$22 billion of Spectra debt, the report said, citing a statement from Enbridge.
Enbridge Chief Executive Al Monaco will lead the combined company, which will be headquartered in Calgary. Greg Ebel, Spectra’s CEO, will be non-executive chairman.
After the close of the deal, Enbridge shareholders will own about 57 percent of the combined entity.
Enbridge’s pipelines mainly send Canadian oil sands to refiners on the US Gulf Coast, while Spectra’s network ships natural gas to the US East Coast.
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