Canadian energy infrastructure company AltaGas Ltd said it would buy U.S.-based WGL Holdings Inc in a deal valued at C$8.4 billion ($6.42 billion), the latest company pushing deeper into natural gas distribution.
AltaGas will offer WGL Holdings shareholders $88.25 per share held, a 12 percent premium to the stock’s Wednesday close.
WGL Holdings’s shares were trading at $81.60 in after-market trading.
WGL Holdings, the parent of natural-gas utility Washington Gas, provides natural gas services in Maryland, Virginia and the District of Columbia.
The company also has a retail energy-marketing business and operates natural-gas distribution facilities.
AltaGas’s deal for WGL follows Dominion Resources Inc’s (D.N) $4.4 billion buyout of Questar Corp STR.N last year.
Duke Energy Corp, the largest U.S. power company by generation capacity, said in 2015 it would buy Piedmont Natural Gas Co for $4.9 billion.
Energy firms are betting on natural gas distribution, given rising demand from homes and businesses, and to help offset shrinking profits at utility businesses due to waning power demand.
Calgary-based AltaGas, which operates in the United States and Canada, has three businesses – natural gas gathering and processing, power generation and utilities that deliver natural gas to homes and businesses.
AltaGas said on Wednesday the deal, which includes the assumption of about C$2.4 billion of debt, would add about 7-9 percent to earnings per common share in the first full year of operations.
The company said it expected the transaction to close by the end of the second quarter of 2018.
The Wall Street Journal reported earlier this month, citing sources, that AltaGas was is in talks to merge with WGL Holdings.
J.P. Morgan Securities LLC is the lead financial adviser to AltaGas, while TD Securities Inc is also providing financial advice to the company.
Goldman Sachs and Lazard are the financial advisers to WGL.
By Komal Khettry
Source: Reuters
3M and Dow have announced they are cutting thousands of roles from their global workforces in response to economic pressures. Dow has said it will cut 2,000 jobs across its global workforce (around 5%) in a bid to save US$1bn in 2023. The company says it will also cut costs by shutting down “select assets”, though it did not note where it would halt operations.
Sweden’s state mining firm has discovered what could be Europe’s largest rare earths deposit, and says it could help the bloc reduce its reliance on imports of minerals needed to manufacture clean technologies and meet climate targets.
Henkel and Avantium have been partners since 2019, when Henkel joined the PEFerence consortium. This consortium of partners, coordinated by Avantium, aims to establish an innovative supply chain for FDCA and PEF (polyethylene furanoate).