Canada's Enbridge Inc (ENB) said on Tuesday it would buy Spectra Energy Corp (SE) of Houston in an all-stock deal valued at about $28 billion (C$37 billion) to create the largest North American energy infrastructure company.
The takeover, the most significant energy deal since oil and natural gas prices crashed in mid-2014, highlights how pipeline companies are under pressure to merge as they grapple with overcapacity and sliding tariffs that have slowed dividend growth and unnerved investors.
Enbridge's biggest-ever deal will consolidate its leading position next to U.S. transport giants Kinder Morgan Inc (KMI) and Plains All American Pipeline LP (PAA), which have seen their stock prices sink over the last two years as oil and gas producers slash spending on new wells.
The deal is a shift away from reliance on crude oil and is a bullish bet on natural gas by crude-hauling heavyweight Enbridge. The Calgary-based company expanded existing cross-border pipelines in recent years to help Canada set new export records to the U.S., and the company is one of the biggest owners of oil storage tanks in Cushing, Okla., the pricing hub for West Texas Intermediate crude.
Houston-based Spectra’s natural gas-focused network taps the fast-growing Marcellus basin in the eastern U.S. to serve the Gulf and East Coasts, and includes one of the biggest natural gas pipelines feeding New York City.
No comments:
Post a Comment