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Spectra, Enbridge shareholders approve merger

Spectra Energy Corp and Enbridge Inc. stockholders in separate actions voted to approve the stock-for-stock merger transaction that will result in the creation of an energy infrastructure behemoth.

Around 73% of the total outstanding shares of Spectra Energy stock, and around 98% of the total shares, voted in favor of the union at a Spectra stockholders meeting, according to a Dec. 15 news release.

Separately, Enbridge said 99.42% of shares were voted in favor of the issuance of shares for the transaction.

The combination of the two companies will create an entity with a pro forma enterprise value of approximately C$165 billion. Pending customary closing conditions, the merger is expected to close within the first three months of 2017.

"This is a transformational combination ... It diversifies our asset base and creates significant financial flexibility that allows us to continue to compete for — and win — the most significant, attractive growth projects," Spectra Energy CEO Greg Ebel said in the Spectra news release. "It will provide an expected annualized 15% dividend increase in year one, and is expected to increase and extend future annual dividend growth, from Spectra Energy's current rate of about 8% annually, to a range of 10% to 12% annually through at least 2024, with greatly enhanced distributable cash flow coverage also expected over this timeframe."

Enbridge President and CEO Al Monaco said in a news release, "We expect to generate industry-leading cash flow and dividend growth, which will continue to be underpinned by sound commercial structures and a strong balance sheet."

The two parties recently reached an agreement with the U.S. Federal Trade Commission that sets the timing of the closing of their merger after they have provided additional information requested of them.