US FTC approves proposed merger of Enbridge and Spectra Energy

The US Federal Trade Commission (FTC) has cleared the proposed merger of US pipeline and midstream company Spectra Energy with Canada's largest pipeline company Enbridge. The merger agreement, under which Enbridge will acquire Spectra Energy in a stock-for-stock merger transaction which will value Spectra Energy at approximately C$37bn (US$28bn), was announced in September 2016.



Enbridge operates the world's longest crude oil and liquids transportation system across Canada and the United States and is increasingly involved in gas gathering, transmission and midstream business, as well as in power transmission. Enbridge owns and operates Canada's largest natural gas distribution company, serving residential, commercial, and industrial customers in Ontario, Quebec, New Brunswick and New York State. The company has interests in nearly 2 GW of net renewable capacity, and continues to expand into wind, solar and geothermal power.

Spectra Energy operates approximately 33,800 km of gas and crude oil pipelines, approximately 8.5 bcm of gas storage and 4.8 mbl of crude oil storage, as well as gas gathering, processing, and local distribution operations. Spectra Energy also has a 50% ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States.

The combination will create the largest energy infrastructure company in North America and one of the largest globally based on a pro-forma enterprise value of approximately C$165bn (US$127bn).



With this clearance from the FTC, the final regulatory requirement for closing is clearance under the Canadian Competition Act. The companies continue to expect the transaction to close in the first quarter of 2017.