TRANSCANADA Corp, the company behind the controversial Keystone XL oil pipeline, said on Thursday it would buy Columbia Pipeline Group for $US10.2billion ($F21b), creating one of North America’s largest regulated natural gas transmission businesses.
The deal, valued at $US13b ($F27b) including debt, comes months after US President Barack Obama blocked the cross-border Keystone XL crude pipeline.
His decision was a victory for environmentalists and a blow to TransCanada after a seven-year battle for approval.
TransCanada will offer $US25.50 ($F53) per share in cash for each Columbia Pipeline share, an 8.5 per cent premium to the stock’s Thursday close.
Columbia Pipeline shares were at $US24.75 ($F51) in extended trading, while TransCanada’s US-listed shares were down nearly 4 per cent at $US36.50 ($F76).
Columbia Pipeline owns and operates about 15,000 miles of natural gas pipelines, connecting the US Gulf Coast to the Midwest, Mid-Atlantic and Northeast United States, home to some of the country’s most prolific shale gas plays.
That pipeline system will link up with TransCanada’s existing assets to create a 5700-mile network spanning the continent.
“This acquisition represents a rare opportunity to invest in an extensive competitively positioned growing network of regulated natural gas pipeline and storage assets in the Marcellus and Utica regions of the United States,” TransCanada CEO Russ Girling said on a conference call.
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