Enbridge Inc (TSX:ENB). (NYSE:ENB) announced on Tuesday that it has entered into three separate definitive agreements to acquire natural gas distribution companies from Dominion Energy Inc. (NYSE:NYSE:D). The aggregate purchase price for the acquisitions is $14.0 billion, inclusive of $9.4 billion in cash and $4.6 billion of assumed debt.
The acquired companies - The East Ohio Gas Company, Public Service Company of North Carolina, Incorporated, and Questar Gas Company along with Wexpro Company - serve approximately 3 million homes and businesses across Ohio, North Carolina, Utah, Wyoming, and Idaho. Collectively, they comprise about 78,000 miles of natural gas distribution, transmission, gathering, and storage pipelines; more than 62 Bcf of working underground and liquefied natural gas storage capacity; and approximately 400 Bcfe of cost-of-service regulated gas reserves as of year-end 2022.
Following the acquisitions' completion, Enbridge will have a significant presence in the U.S. utility sector. The acquired assets will double the scale of Enbridge's gas utility business to approximately 22% of its total adjusted EBITDA and balance the company's asset mix evenly between natural gas and renewables, and liquids.
Dominion Energy expects to use the estimated after-tax proceeds of $8.7 billion from the transactions to reduce parent debt in addition to the conveyance of $4.6 billion of operating company debt. The transactions are expected to improve Dominion's consolidated FFO to debt ratio by approximately 3.4%.
Robert M. Blue, Dominion Energy chair, president, and chief executive officer said to PR Newswire: "We are delighted to be partnering with Enbridge who shares our ideals around employee engagement, regulatory transparency, local community investment, and exceptional customer service."
The transactions require clearance under various regulatory bodies including the Hart-Scott-Rodino Act, Federal Communications Commission, Committee on Foreign Investment in the United States as well as review or approval from Idaho Public Utilities Commission North Carolina Utilities Commission Public Utilities Commission of Ohio Utah Public Service Commission , and Wyoming Public Service Commission.
Greg Ebel, Enbridge President and CEO said: "Adding natural gas utilities of this scale and quality, at a historically attractive multiple, is a once in a generation opportunity." He further noted that the acquisitions will enhance Enbridge's stable cash flow profile and strengthen its long-term dividend growth profile.
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