Canada’s Enbridge Inc. said recently it would buy Spectra Energy Corp of Houston in an all-stock deal valued at about CAD $37 billion (USD $28 billion) to create the largest North American energy infrastructure company.
The takeover, the most significant energy deal since oil and natural gas prices crashed in mid-2014, highlights how pipeline companies are under pressure to merge as they grapple with overcapacity and sliding tariffs that have slowed dividend growth and unnerved investors.
Enbridge’s biggest-ever deal will consolidate its leading position next to U.S. transport giants Kinder Morgan Inc. and Plains All American Pipeline LP. Enbridge’s pipelines mainly send Canadian oil sands to refiners on the U.S. Gulf Coast, while Spectra’s network ships natural gas to the U.S. East Coast.