Enbridge to Buy Rest of Spectra Energy for $3.3 Billion -- Update
24 Agosto 2018 - 11:32AM
Dow Jones News
By Allison Prang
Oil and gas pipeline operator Enbridge Inc. has reached a deal
to buy the rest of Spectra Energy Partners LP for about $3.3
billion in stock.
Calgary-based Enbridge, which owns about 83% of Spectra, is
offering about 1.11 of its shares for each unit of Spectra it
doesn't already own.
Enbridge said buying the rest of Spectra, a master limited
partnership, helps simplify its corporate structure. The company
also said the purchase will provide tax benefits after 2020.
Master limited partnerships in the energy sector gained favor
because of the tax benefits they could reap. However, a decision
from the Federal Energy Regulatory Commission earlier this year
portended curbs on some of those benefits. At the time, one analyst
said FERC's move would speed up the conversion of partnerships into
corporations.
In July, however, FERC released guidance that preserved a key
benefit for certain master limited partnerships regarding the
treatment of accumulated deferred income taxes.
Williams Cos., a Tulsa, Okla.-based natural-gas-pipeline
operator, was among the companies that pursued a deal after the
ruling. In May it announced it would buy the 27% of Williams
Partners it didn't already own for about $10.5 billion in
stock.
The Enbridge deal announced Friday comes after it proposed in
May to buy out Spectra unit holders, offering about 1.01 shares in
Enbridge for each unit of Spectra it didn't own.
Spectra's board delegated a committee of independent directors
to evaluate the May proposal. That same committee recommended the
full board approve the latest Enbridge offer. Spectra's board
approved the deal.
Spectra unit holders collectively would own about 5% of Enbridge
shares after the transaction closes.
Spectra, based in Houston, has over 15,000 miles in transmission
pipelines and stores natural gas and crude oil.
Spectra units rose 3.6% in premarket trading.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
August 24, 2018 10:17 ET (14:17 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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