The Successful Investor Hotline – Friday, March 18, 2016

Article Excerpt

TRANSCANADA CORP., $49.08, Toronto symbol TRP, has agreed to buy Texas-based Columbia Pipeline Group (New York symbol GPCX) for $13 billion U.S. That figure includes $2.8 billion U.S. of Columbia’s debt. This is a big purchase for TransCanada, which has a market cap of $35.4 billion (Canadian). Columbia operates natural gas pipelines in the U.S. Northeast, Midwest, Mid-Atlantic and Gulf Coast regions, as well as underground gas storage terminals. It’s now working on $5.6 billion U.S. worth of new pipelines. Columbia has already secured contracts from gas shippers, which cuts the risk of these projects. To help pay for this acquisition, TransCanada plans to sell some of its electrical power plants in the U.S. northeast along with its minority stake in a Mexican pipeline. In addition, it will raise $4.4 billion (Canadian) by selling up to 96.6 million new common shares at $45.75 a share. That will increase the total outstanding by roughly 14%. If Columbia shareholders and regulators approve, TransCanada expects to complete…