ENB - Enbridge signs a $14 billion deal with Dominion Energy

2023-09-06 11:42:29 ET

Shares of Enbridge Inc (NYSE: ENB) are in focus on Wednesday after the natural gas utility company announced a $14 billion deal with Dominion Energy Inc (NYSE: D).

Details of Enbridge-Dominion deal

Enbridge has decided in favour of acquiring three U.S. based utilities – Public Service Company of North Carolina, East Ohio Gas Company, and Questar Gas – from Dominion Energy.

Royal Bank of Canada and Morgan Stanley have committed $9.4 billion in debt financing for the said agreement. According to Greg Ebel – the Chief Executive of Enbridge Inc:

Everybody needs natural gas. There’s no positive energy future from sustainability or affordability perspective without it. This will create the largest platform for natural gas utilities in North America.

Enbridge carried out a bought-deal offering worth $2.93 billion as well to finance this deal, as per its press release today.

What’s in it for Enbridge Inc?

Enbridge expects a boost to its distributable cash flow as well as per-share earnings (adjusted) in the first year after closing this transaction. On CNBC’s “ Squawk Box ”, its Chief Executive also said today:

This really is just a great opportunity for us and our shareholders and we’ll continue to be able to grow the dividend grow earnings on a go forward basis. It actually fits our portfolio.

The stock market news arrives about a month after the Canadian firm said its revenue came in down 25% on a year-over-year basis in the second quarter . Its shares are currently trading more than 20% below their year-to-date high.

Dominion Energy Inc now plans on updating its outlook in the final quarter of this year.

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