Pembina and Veresen to create giant energy company in $9.7 billion deal
Staff Writer |
Pembina Pipeline Corporation and Veresen announced they have entered into an arrangement agreement to create one of the largest energy infrastructure companies in Canada with a pro-forma enterprise value of approximately $33 billion.
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The combined company will feature an asset base supported by long-life, economic hydrocarbon reserves concentrated in some of the most prolific resource plays in North America.
The diversified portfolio will include crude oil, liquids and natural gas pipelines, terminal, storage and midstream operations, gas gathering and processing facilities as well as fractionation facilities.
The combined company expects to drive significant shareholder value.
Under the terms of the arrangement agreement, Pembina is offering to acquire all the issued and outstanding shares of Veresen by way of a plan of arrangement under the Business Corporations Act (Alberta).
The transaction is valued at approximately $9.7 billion including the assumption of Veresen's debt (including subsidiary debt) and preferred shares.
Pembina is offering to acquire all of the outstanding Veresen common shares in exchange for either 0.4287 of a common share of Pembina or $18.65 in cash, subject to pro-ration based on maximum share consideration of approximately 99.5 million Pembina common shares and maximum cash consideration of approximately $1.523 billion.
Assuming full pro-ration, each Veresen shareholder would receive $4.8494 in cash and 0.3172 of a common share of Pembina for each Veresen common share.
This offer represents a 21.8 percent premium to Veresen's 20 day weighted average price of $15.31 and a 22.5 percent premium to Veresen's closing share price of $15.23 on April 28, 2017.
The transaction was unanimously approved by the boards of directors of both companies and is expected to close late in the third quarter or early in the fourth quarter of 2017.
The transaction is subject to approval of at least 662/3 percent of holders of Veresen's common shares. ■