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2016-03-22 19:00:00

TRANSCANADA DEAL: $13 BLN

TRANSCANADA DEAL: $13 BLN

TransCanada, which had hoped to build the controversial Keystone XL oil pipeline, has found another path to growth in the US by agreeing an all-cash $13bn deal to buy Columbia Pipeline Group, a gas transmission company.

The deal will give Calgary-based TransCanada a strategic position in the Marcellus and Utica shales of Pennsylvania, Ohio and West Virginia, the most promising regions in the US for gas production growth.

Columbia has a set of growth projects worth $5.6bn under way in the US, where TransCanada previously had only limited scope for expansion.

The offer values Columbia's equity at about $10.2bn, and TransCanada will also be taking on about $2.8bn in debt, to give an enterprise value of about $13bn.

Buying Columbia will raise the proportion of Transcanada's earnings that are governed by regulators, from 57 per cent to 62 per cent.

It is following several other North American utility companies that have done deals in recent years to increase their dependence on regulated operations, which generally have more stable revenues and profits.

The combined group will be one of the largest regulated gas transmission companies in North America, with almost 57,000 miles of pipelines.

The deal offers $25.50 in cash for every Columbia share, a premium of about 30 per cent above the price before news that the two companies were in talks emerged last week.

Russ Girling, Transcanada's chief executive, said the deal represented "a rare opportunity" to invest in regulated natural gas pipelines and storage assets in the Marcellus and Utica shale regions.

TransCanada has already financed part of the purchase price with a $4.2bn sale of subscription receipts, which can be converted into TransCanada shares when the deal closes. Until then, holders of the receipts will be paid dividends the same as shareholders.

They were sold in a bought deal at a price of C$45.75 each to RBC Capital Markets and TD Securities, which will then sell them to the public. The price paid by the banks represents a discount of about 7 per cent to the TransCanada closing share price of C$49.42 on Thursday evening.

TransCanada also plans to sell its five power generation facilities in the north-eastern US, including the large Ravenswood gas and oil-fired plant in New York City, and its minority stake in gas pipelines in Mexico.

The plunge in oil and gas prices since the summer of 2014 has damaged many pipeline companies. Even though they are less affected than the oil and gas producers, they may still bear some commodity price risk, and if low prices deter production growth then the pipeline businesses will also have less opportunity to expand.

That is less of a concern in the Marcellus and Utica shales, however, because they are among the lowest-cost sources of production in the US.

The Utica has been booming, despite the price slump, and its gas output has risen 30 per cent over the past year.

The deal, which is expected to close by the end of the year, will end a brief period of independence for Columbia, which was spun out of the utility NiSource only last year.

Bankers at Lazard, which advised Columbia, said in a statement that the takeover "further highlights the potential for separation transactions to create significant value for the separated entities".

ft.com

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More: 

EUROPE: ALTERNATIVE SUPPLIERS $12 BLN 

MARKET FEARS SHALE GAS

 

 

 

Tags: TRANSCANADA, PIPELINE, USA, COLUMBIA

Chronicle:

TRANSCANADA DEAL: $13 BLN
2018, February, 16, 23:15:00

DEWA INVESTS $22 BLN

AOG - The Dubai Electricity & Water Authority (DEWA) is to invest around $22bn on new energy projects across the next five years, with the renewables sector accounting for an increasing share of electricity generation, according to CEO Saeed Mohammed Al Tayer.

TRANSCANADA DEAL: $13 BLN
2018, February, 16, 23:10:00

TRANSCANADA NET INCOME $3.0 BLN

TRANSCANADA - TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada or the Company) announced net income attributable to common shares for fourth quarter 2017 of $861 million or $0.98 per share compared to a net loss of $358 million or $0.43 per share for the same period in 2016. For the year ended December 31, 2017, net income attributable to common shares was $3.0 billion or $3.44 per share compared to net income of $124 million or $0.16 per share in 2016.

TRANSCANADA DEAL: $13 BLN
2018, February, 16, 23:05:00

RUSSIAN NUCLEAR FOR CONGO

ROSATOM - February 13, 2018, Moscow. – ROSATOM and the Ministry of Scientific Research and Technological Innovations of the Republic of Congo today signed a Memorandum of Understanding on cooperation in the field of peaceful uses of atomic energy.

TRANSCANADA DEAL: $13 BLN
2018, February, 16, 23:00:00

U.S. INDUSTRIAL PRODUCTION DOWN 0.1%

FRB - Industrial production edged down 0.1 percent in January following four consecutive monthly increases. Manufacturing production was unchanged in January. Mining output fell 1.0 percent, with all of its major component industries recording declines, while the index for utilities moved up 0.6 percent. At 107.2 percent of its 2012 average, total industrial production was 3.7 percent higher in January than it was a year earlier. Capacity utilization for the industrial sector fell 0.2 percentage point in January to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2017) average.

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