The combined company, valued at about $127 billion, would be the largest energy infrastructure company in North America, per a release. The merger is expected to close in the first quarter of 2017.
In the deal, Spectra Energy shareholders will receive 0.984 shares of the combined company for each share of Spectra Energy common stock they own. That values Spectra Energy at about $40.33 per share, an 11.5 percent premium to the closing price of of Spectra’s stock on Sept. 2.
After the transaction, Enbridge shareholders will own about 57 percent of the combined company. Spectra shareholders will own about 43 percent. The company will retain the Enbridge Inc. name. Combined assets include crude oil, liquids and natural gas pipelines, terminal and midstream operations, a regulated utility portfolio and renewable power generation.
“Over the last two years, we’ve been focused on identifying opportunities that would extend and diversify our asset base and sources of growth beyond 2019,” Al Monaco, president and CEO of Enbridge Inc., said in the release. “We are accomplishing that goal by combining with the premier natural gas infrastructure company to create a true North American and global energy infrastructure leader.
“With combined secured projects in execution of $20 billion and another $37 billion of projects under development, the transaction allows us to extend our anticipated 10-12 percent annual dividend growth through 2024.”
Monaco is expected to serve as president and CEO of the combined company. Greg Ebel — currently chairman, president and CEO of Spectra Energy — is expected to serve as nonexecutive chairman of the combined company’s board.