Enbridge Inc. (NYSE: ENB), Canada's largest pipeline operator, said Aug. 24 it would buy its U.S. MLP Spectra Energy Partners (NYSE: SEP) for a sweetened deal of $3.3 billion.
Pipeline companies are reorganizing their business structure after the U.S. Federal Energy Regulatory Commission in March stopped them from claiming an income tax allowance as part of the fees they charge shippers.
"Significant weakening of the U.S. master limited partnership capital markets has adversely affected the growth opportunities for MLPs, including Spectra," Enbridge said in a statement.
RELATED: Enbridge, Williams, Cheniere Consolidate Assets After New Tax Rules
Enbridge raised its offer to 1.111 of its common shares for each Spectra unit, compared with its previous offer of 1.0123 of its shares.
Spectra Energy shares rose 5.7% to $40 in premarket trading, while those of Enbridge were marginally down.
BofA Merrill Lynch and Scotiabank are financial advisers to Enbridge. McCarthy Tetrault LLP, Sullivan & Cromwell LLP and Vinson & Elkins LLP are acting as the company's Canadian, U.S. legal and tax advisers, respectively.
Jefferies LLC is financial adviser to the Specta's conflicts committee, while Sidley Austin LLP is its legal adviser.
Recommended Reading
Exxon Mobil, Chevron See Profits Fall in 1Q Earnings
2024-04-26 - Chevron and Exxon Mobil are feeling the pinch of weak energy prices, particularly natural gas, and fuels margins that have cooled in the last year.
Buffett: ‘No Interest’ in Occidental Takeover, Praises 'Hallelujah!' Shale
2024-02-27 - Berkshire Hathaway’s Warren Buffett added that the U.S. electric power situation is “ominous.”
Granite Ridge Resources Declares Quarterly Dividend
2024-02-20 - Granite Ridge Resources’ dividend is payable March 15.
Mach Natural Resources Declares 4Q 2023 Distribution
2024-02-20 - Mach Natural Resource’s distribution is payable March 14 to common unitholders of record by Feb. 29.
Patterson-UTI Braces for Activity ‘Pause’ After E&P Consolidations
2024-02-19 - Patterson-UTI saw net income rebound from 2022 and CEO Andy Hendricks says the company is well positioned following a wave of E&P consolidations that may slow activity.