Pipeline giants plan $28b merger

Pipeline giants plan $28b merger
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Canadian pipeline company Enbridge Inc. said it plans to acquire Spectra Energy Corp. for $28 billion, creating North America’s largest energy infrastructure company.

The deal, which is subject to regulatory approval, is the biggest energy merger since oil prices started to crash in the middle of 2014.

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Enbridge operates about 33,000 miles of pipe, specializing in bringing oil sands from Canada to refiners on the United States's Gulf Coast. Spectra mainly moves natural gas to the East Coast.

“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,” Al Monaco, president of Enbridge, said in a statement Tuesday.

“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.”

Greg Ebel, president of Spectra, said the deal “creates what we believe will be the best, most diversified energy infrastructure company in North America, if not the world.”

The acquisition would be made in all stock, with Spectra shareholders getting 0.984 shares of the new company for each current share.

But green groups are raising concerns. Wenonah Hauter, executive director of Food and Water Watch, said the acquisition would be disastrous.

“The proposed merger of Enbridge and Spectra Energy, two fossil fuel pipeline giants that already control much of the oil and gas flow throughout the country, would be bad news for energy consumers and terrible news for the clean energy revolution on which the future of our planet depends,” she said.

“The consolidation of these companies would only enhance the power of the oil and gas industry to manipulate the energy marketplace and encourage the continued use of fracking, the widely used fossil fuel extraction method that is inherently hazardous to human health and our environment.”