Energy company Enbridge entered into a definitive agreement to sell its 50% interest in Alliance Pipeline and 42.7% interest in Aux Sable to energy transportation and midstream service provider Pembina Pipeline for $3.1 billion, on Wednesday.
Enbridge said the sale included non-recourse debt at Alliance of about $300 million, and subject to customary closing adjustments. The company also said the sale price represents a valuation of about 11 times projected 2024 EBITDA for Alliance and almost 7 times for Aux Sable.
Pat Murray, financial chief at Enbridge stated, “With this divestiture, we will have raised $14 billion since 2018 at attractive valuations, as we remain committed to optimizing our portfolio, enhancing our industry leading cash flow profile by reducing commodity price exposure, bolstering financial flexibility, and maintaining a strong balance sheet.”
Enbridge said the deal is effective from January 1, 2024, and it is expected to close in the first half of 2024.
The company also said, as part of the deal, Pembina will also assume operatorship of Alliance. Enbridge added the sales proceeds will fund a portion of its US gas utilities acquisitions and be used for debt reduction.
Pembina Pipeline Corporation is an energy transportation and midstream provider, it owns pipelines that transport hydrocarbon liquids and natural gas products produced primarily in
Canada.
The Calgary, Canada-based firm said National Bank Financial and Scotiabank acted as its financial advisors.
Enbridge is a renewable energy company, advancing low-carbon energy technologies that includes hydrogen, renewable natural gas, and carbon capture and storage.
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