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Enbridge completes acquisition of Spectra Energy

Houston — Canada's Enbridge on Monday completed its acquisition of Houston-based Spectra Energy in a stock-for-stock merger transaction, which is expected to create one of the largest energy infrastructure companies in North America.

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"With the completion of the transaction, Enbridge has become a global energy infrastructure leader with roughly $126 billion in enterprise value," Enbridge spokesman Todd Nogier said in a statement Monday.

"This combination brings together the best liquids and natural gas franchises in North America and is complemented by our rapidly growing renewable power generation business," he said.

The merger, valued at $28 billion (C$37 billion) when it was announced in September, will combine Enbridge's liquid-weighted midstream assets located primarily in western Canada and the US Midwest with Spectra's network of primarily gas-related midstream assets, which include holdings in the US North, Gulf Coast and Midwest and the Canadian province of British Columbia.



Under the merger agreement, each share of Spectra Energy common stock will be converted into 0.984 of an Enbridge common share.

In connection with the completion of the merger, the New York Stock Exchange suspended trading of Spectra Energy common stock effective at the opening of trading Monday.

The combined company will be called Enbridge Inc. and the shares will remain listed on the Toronto Stock Exchange and the NYSE under the stock symbol ENB.

In its recent statement announcing its fourth-quarter 2016 results, Enbridge said the combined company would "include a C$26 billion portfolio of commercially secured growth projects through 2019 and a C$48 billion probability risk-weighted development project portfolio which, together with existing businesses, are expected to support highly visible dividend growth of 10% to 12% per annum through 2024."


LITTLE RESISTANCE FROM REGULATORS


Unlike last year's abortive attempt to combine two giant midstream companies -- the proposed acquisition of The Williams Companies by Energy Transfer Equity, which fell apart in June -- the merger of Enbridge and Spectra moved through the regulatory process with relative ease.

Given that the asset sets of the two companies were geographically diverse, Canadian or US regulators found little reason to challenge the proposed deal on grounds that it would harm competition.

The Enbridge/Spectra deal cleared one of the last remaining regulatory hurdles earlier this month when the US Federal Trade Commission issued an order that would establish a firewall to prevent distribution of information about pipeline systems in the offshore Gulf of Mexico among the merged companies' affiliates.

The FTC's order removed the agency's objections that the proposed combination otherwise likely would have harmed competition for gas pipeline transportation in three production areas off the coast of Louisiana.

The proposed merger had previously received several required approvals from US and Canadian regulatory agencies, including a clearance under the Canada Transportation Act.

Additionally, on December 8, the Ontario Energy Board said it was satisfied that the combination did not require its approval.

Later that month, the two pipeline companies said they had received notice from the Committee on Foreign Investment in the US, which found no unresolved national security concerns with the proposed combination.

--Jim Magill, jim.magill@spglobal.com

--Edited by Jason Lindquist, jason.lindquist@spglobal.com