Enbridge buys Spectra

Article Excerpt

ENBRIDGE INC. $56.98 (Toronto symbol ENB; Shares outstanding: 934.2 million; Market cap: $53.2 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.enbridge.com) will buy Spectra Energy Corporation (New York symbol SE) for $37 billion in Enbridge stock. Based in Houston, Texas, Spectra operates 143,520 kilometres of crude oil and natural gas pipelines in the U.S. and Canada. It also owns oil and gas storage facilities. Long-term contracts from oil and gas shippers will provide 96% of the new company’s cash flow. As well, eliminating overlapping operations should cut its annual costs by $540 million starting in 2018. nbridge and Spectra are now working on new pipelines and other projects worth a combined $26 billion. Those developments should be finished between 2017 and 2019. The new company will then consider spending another $48 billion on other projects. Thanks to additional cash flow, Enbridge now expects to increase its annual dividend by 15% in 2017 and between 10% and 12% each year…