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Enbridge to buy Spectra Energy in $28 billion deal

Staff Writer |
Enbridge, Canada's largest pipeline company, will buy Spectra Energy in an all-stock deal valued at about C$37 billion ($28 billion) to create the largest North American energy infrastructure company.

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Spectra shareholders will get 0.984 shares of the combined company for each share held. This is equivalent to $40.33 per share, representing a premium of about 11.5 percent to Spectra's closing price on Friday.

The deal has a pro-forma enterprise value of $127 billion, the companies said. Enbridge will take on about $22 billion of Spectra debt and issue 694 million new shares.

Enbridge CEO Al Monaco will lead the combined company, which will have its headquarters in Calgary. Greg Ebel, Spectra's CEO, will be non-executive chairman.

"Over the last two years, we've been focused on identifying opportunities that would extend and diversify our asset base and sources of growth beyond 2019," Monaco said in a statement.

"We are accomplishing that goal by combining with the premier natural gas infrastructure company to create a true North American and global energy infrastructure leader."

After the close of the deal, Enbridge shareholders will own about 57 percent of the combined company, which is expected to deliver annual run-rate synergies of C$540 million, most of which is expected to be achieved in late 2018.

Enbridge said it planned to divest about $2 billion of non-core assets over the next year to stay financially flexible.


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