Pembina Pipeline Corp. and Kinder Morgan Canada Ltd. have expanded their merger agreement to include the Kinder Morgan Inc. subsidiary's preferred shares, pending approval from its holders.
Under the amended deal, each Kinder Morgan Canada preferred share would be exchanged for a Pembina preferred share with the same commercial terms and conditions, according to a Sept. 10 news release. The amendment is subject to approval by at least 66.67% of votes cast by Kinder Morgan Canada's preferred shareholders.
If the preferred shareholders do not approve the deal, the preferred shares will remain outstanding as shares in Kinder Morgan Canada's capital, which will become part of the Pembina group upon closing of the original deal, the other terms of which remain unchanged.
The amendment has the unanimous approval of Kinder Morgan Canada's board. The company's special committee received a fairness opinion from BMO Capital Markets.
Pembina in August agreed to acquire Kinder Morgan's Canadian unit and the U.S. portion of the Cochin condensate pipeline system for about C$4.35 billion. The deal values Kinder Morgan Canada at about C$2.3 billion, or C$15.02 per share, at the time of announcement.
Kinder Morgan Canada manages and holds a roughly 30% minority interest in a set of energy infrastructure assets in western Canada. Kinder Morgan holds a 70% majority voting interest in Kinder Morgan Canada and a 70% economic interest in its business and assets. Pembina also owns a system of natural gas and liquids pipelines in western Canada.
