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The Transaction will create one of the largest energy infrastructure companies in Canada, with a pro forma enterprise value of $53 billion and a diversified and integrated asset base that can support and grow an extensive value chain for natural gas, natural gas liquids and crude oil, from wellhead to end user.
Furthermore, past and future investments by both companies will help access new demand markets for the Western Canadian Sedimentary Basin ("WCSB"), benefitting Pembina, its customers and the provinces of Alberta and British Columbia alike.
Once the Heartland Petrochemical Complex ("HPC") is in full service, the combined company is expected to generate $1.1 billion to $1.4 billion of adjusted cash flow from operating activities after dividends annually, greatly enhancing its ability to fund existing and future capital investment.
Pembina's monthly dividend to increase by $0.01 per share, or 4.8 percent, to $0.22 per share following closing of the Transaction. Following the successful commissioning and in-service of HPC, currently expected in 2022, incremental cash flow from the project is expected to support a further increase to the monthly dividend of an additional $0.01 per share, to $0.23 per share.
Under the terms of the Transaction, Inter Pipeline shareholders will receive 0.5 of a share of Pembina for each share of Inter Pipeline that they own.
The consideration to be received by Inter Pipeline shareholders is valued at $19.45 per Inter Pipeline share based on the closing price of Pembina common shares on May 31, 2021, which represents a premium of approximately 17.8 percent to the value implied by the takeover bid announced by Brookfield Infrastructure Corporation.
The Transaction is valued at approximately $15.2 billion, including the assumption of Inter Pipeline's debt. Pembina and Inter Pipeline shareholders are expected to own 72 percent and 28 percent of the combined company, respectively.
The combined entity will continue to be led by Pembina's senior executive team. Representation from Inter Pipeline on Pembina's board of directors will be determined prior to closing of the Transaction. ■