Pembina Pipeline enters into agreement to acquire Inter Pipeline from Canada

Pembina Pipeline has agreed to acquire Inter Pipeline in a transaction valued at approximately $ 6.9 billion (C $ 8.3 billion).

Under the terms of the agreement, Inter Pipeline shareholders will receive half a Pembina Pipeline share for each share held. Inter Pipeline shares are currently valued at $ 16.1 (C $ 19.45).

The deal is valued at around $ 12.58 billion (C $ 15.2 billion), including debt from Inter Pipeline.

Pembina Pipeline expects the deal to create one of Canada’s leading oil and gas transportation companies.

Following the transaction, the shareholders of Pembina Pipeline will own 72% of the capital of the merged company. Inter Pipeline shareholders will own the remaining 28%.

The combined business will have a pro forma enterprise value of $ 43.88 billion (C $ 53 billion).

The acquisition is expected to increase Pembina Pipeline’s pipeline capacity from 3.1 million barrels per day (mmbe / d) to approximately 6.2 mmbe / d.

In addition, the company’s processing capacity is expected to increase from 6.1 billion cubic feet per day (Bcf / d) to 8.8 Bcf / d.

The company’s fractionation capacity will also increase from 350,000 barrels per day (mmbd) to approximately 390,000 bbl / d and storage capacity from 32 million barrels (mmbbl) to approximately 38-32 mmbbl.

Pembina Pipeline Chairman of the Board, Randy Findlay, said: “The transaction is highly strategic for Pembina and Inter Pipeline, providing clear visibility on creating long-term sustainable value for our respective shareholders.

“This represents a compelling opportunity to continue to build on our respective low-risk, long-term, fee-for-service business model, expand our customer service offerings and create significant value through the realization of synergies. , vertical integration and high yield growth. Opportunities. ”

The transaction, which is expected to close in the fourth quarter of 2021, is subject to both company shareholder approvals, regulatory approvals and Alberta Court of Queen’s Bench acceptance.

The deal comes nearly four months after Inter Pipeline rejected the hostile C $ 7.1 billion Brookfield Infrastructure Partners takeover bid.

The latest transaction represents a premium of approximately 17.8% over the value of Brookfield’s takeover bid.

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