Enbridge Inc. of Canada has agreed to purchase Spectra Energy Corp. of Houston, Texas, in a $28 billion all-stock deal, reported The Wall Street Journal.
The boards of each pipeline company are fully backing the acquisition that will create one massive energy pipeline and storage organization. In a joint press release, the companies noted that the deal should close in early 2017, according to the WSJ.
Assets of the newly established company will include natural gas pipelines, liquids and crude oil, terminal and mainstream operations, renewable power generation operations as well as a regulated utility portfolio. Under the company name Enbridge Inc., the merge will leave current Enbridge shareholders with 57 percent of the combined company while shareholders of Spectra Energy will now own 43 percent.
Enbridge also announced expectations to divest $2 billion of non-core assets over the course of the next year, reported Bloomberg.
Overall, the amalgamation has the potential to reach $418 million in cost savings.
“Over the last two years, we’ve been focused on identifying opportunities that would extend and diversify our asset base and sources of growth beyond 2019,” CEO and president of Enbridge, Al Monaco, said in a statement. “We are accomplishing that goal by combining with the premier natural gas infrastructure company to create a true North American and global energy infrastructure leader.”