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Brookfield Infrastructure to buy Enbridge’s Western Canadian midstream business
Posted on Friday, 06 July 2018 10:34
Brookfield Infrastructure Partners has announced it is to acquire Enbridge’s Canadian midstream business for CAD 4.31 billion (USD 3.30 billion).

Reuters noted news of the deal follows the vendor’s efforts to reduce company debt.

Brookfield is buying the business in partnership with institutional investors and will hold a 30.0 per cent stake in the unit upon completion.

It will partially fund the deal with the proceeds from its sale of Transelec, which completed in March 2018, as well as other available liquidity.

The transaction remains subject to regulatory approval, among other customary conditions, and will be closed in two stages before mid-2019.

Of the two phases, the first will occur this year following provincial regulation of facilities, while the second is dependent on federal regulation.

The Canadian midstream business, headquartered in western Canada, consists of 19 natural gas processing plants, including Montney and Peach River Arch, among others in British Columbia and Alberta as well as liquid handling facilities.

Al Monaco, chief executive of Enbridge, said: “The sale significantly advances our strategic priority of moving to a pure play regulated pipeline and utility business model”.

Spanning 3,550 kilometres of gathering pipelines, the sites enable access into key markets such as the US Pacific Northwest, US Midwest and Western Canada.

Brookfield Infrastructure Partners’ chief executive, Sam Pollock, stated: “The business is strategically positioned for the continued development of the prolific Montney Basin.”

He also added the cash flows are bolstered by a contract profile with a lifespan of 10 years.

According to Zephyr, the M&A database published by Bureau van Dijk, there have been eight deals targeting companies engaged in the pipeline transportation of crude oil announced worldwide since the beginning of 2018.

The largest of these is worth USD 590.00 million and took the form of a capital increase by asphalt refining services company NuStar Energy, as part of which EIG Management and FS/EIG Advisor subscribed for shares.

© Zephus Ltd