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
Civitas Adds Former EOG Exec Lloyd Helms to Board
2025-02-26 - In conjunction with its recent $300 million Midland Basin bolt-on, Civitas Resources has increased its board to 10 directors.
Rising Phoenix Capital Launches $20MM Mineral Fund
2025-02-05 - Rising Phoenix Capital said the La Plata Peak Income Fund focuses on acquiring producing royalty interests that provide consistent cash flow without drilling risk.
Equinor Commences First Tranche of $5B Share Buyback
2025-02-07 - Equinor began the first tranche of a share repurchase of up to $5 billion.
Chevron Makes Leadership, Organizational Changes in Bid to Simplify
2025-02-24 - Chevron Corp. is consolidating its oil, products and gas organization into two segments: upstream and downstream, midstream and chemicals.
Elliott Nominates 7 Directors for Phillips 66 Board in Big Push for Restructuring
2025-03-04 - Elliott Investment Management, which has taken a $2.5 billion stake in Phillips 66, said the nominated directors will bolster accountability and improve oversight of Phillips’ management initiatives.