Enbridge Inc. (NYSE:) is set to acquire EOG, Questar, and PSNC from Dominion Energy, Inc. (NYSE:) for a total purchase price of $14.0 billion (CDN$19B), including $9.4B in cash and $4.6B in assumed debt. Here are key things to know:
- The acquisitions will expand Enbridge’s presence in the U.S. utility sector, adding gas utility operations in Ohio, North Carolina, Utah, Idaho, and Wyoming.
- Following the acquisitions, Enbridge’s gas utility business will become the largest in North America, serving approximately 7 million customers with a combined rate base of over CDN$27B.
- The purchase price for the acquisitions is estimated at ~1.3x Enterprise Value-to-Rate Base (based on 2024 estimates) and ~16.5x Price-to-Earnings (based on 2023 estimates).
- The acquisitions are expected to be accretive to Enbridge’s financial DCFPS and adjusted EPS outlook in the first full year of ownership.
- Dominion sees total estimated after-tax proceeds of $8.7B; will be used to reduce parent debt, along with the conveyance of $4.6B of operating company debt, improving the company’s consolidated FFO to debt by approximately 3.4%.
- Enbridge’s CAD $4B equity offering aims to address common equity issuance needs for financing the transaction, ensuring flexibility to balance financing sources as required.
- Debt financing commitments totaling $9.4B have been secured from Morgan Stanley and Royal Bank of Canada to support the cash consideration component of the acquisitions.
- The transactions are expected to close in 2024, subject to regulatory approvals, including clearance from the Federal Trade Commission and state public utility commissions.