Enbridge, Spectra create pipeline behemoth

HOUSTON, September 6, 2016 – Oil and gas pipeline companies Enbridge and Spectra Energy on Tuesday announced a stock-for-stock merger, thereby creating the biggest energy infrastructure company in North America in terms of enterprise value.

In a statement, the companies said the pro-forma enterprise value of the combined entity is around USD 127 billion. Forecasted savings from the merger, which is expected to close in the first quarter of 2017, are in the range of USD 415 million per year over the next two years. The utilisation of tax losses will allow the combined entity to realise an additional USD 200 million in tax savings.

“Bringing Enbridge and Spectra Energy together makes strong strategic and financial sense, and the all-stock nature of the Transaction provides shareholders of both companies with the opportunity to participate in the significant upside potential of the combined company,” Enbridge President and CEO Al Monaco said in comments on the merger. According to Monaco, the two companies have a combined project portfolio valued at USD 20 billion under execution, with a further USD 37 billion in projects under development.

Monaco’s counterpart at Spectra Energy, Greg Ebel, said, “The strength of the combined company will support a large capital program to fund the continued development of Spectra Energy’s existing, preeminent project inventory in addition to allowing the combined company to compete for and win the most attractive new growth projects – all while maintaining expected strong dividend growth with exceptional coverage.”

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