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
Shipping Traffic Freezes Up in Port Waters After Baltimore Bridge Collapse
2024-03-26 - U.S. port of Baltimore traffic was suspended until further notice following a bridge collapse. At least 13 vessels expected to load coal were anchored near the port at the time of the incident.
The Secret to Record US Oil Output? Drilling Efficiencies—EIA
2024-03-06 - Advances in horizontal drilling and fracking technologies are yielding more efficient oil wells in the U.S. even as the rig count plummets, the Energy Information Administration reported.
Exclusive: Despite Uncertainty, NatGas Balances Out
2024-03-04 - McKinsey and Co.'s Luciano Di Fiori says the natural gas market is capable of balancing itself out—despite LNG permit approval pauses, midstream constraints and dependence on oil production—in this Hart Energy LIVE Exclusive interview with Editorial Director Jordan Blum.
Gunvor Group Inks Purchase Agreement with Texas LNG Brownsville
2024-03-19 - The agreement with Texas LNG Brownsville calls for a 20-year free on-board sale and purchase agreement of 0.5 million tonnes per annum of LNG for a Gunvor Group subsidiary.
Darbonne: Brownsville, We Have LNG Liftoff
2024-04-02 - The world’s attention is on the far south Texas Gulf Coast, watching Starship liftoffs while waiting for new and secure LNG supply.