Pembina Pipeline to Acquire Kinder Morgan Entities for $3.27 Billion -- Update
August 21 2019 - 8:47AM
Dow Jones News
By Dave Sebastian
Pembina Pipeline Corp. (PBA) said Wednesday it has agreed to
acquire Kinder Morgan Canada Ltd. (KML) and the U.S. portion of the
Cochin pipeline system from Kinder Morgan Inc. (KMI).
Pembina values the deals at C$4.35 billion ($3.27 billion),
including debt. Kinder Morgan Inc. is set to receive roughly $2.5
billion as part of the deals.
The Canadian pipeline-transport company said it will acquire the
U.S. portion of the Cochin pipeline, which spans from Chicago to
Fort Saskatchewan, Alberta, for $1.55 billion in cash, which
Pembina values at C$2.05 billion.
Pembina said it would acquire Kinder Morgan Canada for C$2.3
billion including Kinder Morgan Canada's preferred shares and
outstanding net debt. Kinder Morgan will receive 25 million shares
of Pembina, or roughly $927.3 million, based on Pembina's closing
price on Tuesday.
Pembina said it would issue 0.3068 of its common shares for each
outstanding restricted-voting share and Class B unit of Kinder
Morgan Canada. The exchange ratio represents a 32% premium over
Pembina and Kinder Morgan Canada's 30-day volume-weighted average
prices of C$48.96 and C$11.37, respectively, Pembina said.
The deals would add to Pembina's adjusted cash flow per share as
well as increase the company's fee-for-service and take-or-pay
component of adjusted earnings before interest, taxes, depreciation
and amortization.
Pembina said its board of directors approved an increase of a
penny a share, or about 5%, to its monthly dividend rate, subject
to the closing of the transaction.
(END) Dow Jones Newswires
August 21, 2019 08:32 ET (12:32 GMT)
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