Deal trumps hostile offer by Brookfield
The Pembina-Inter combination is the largest Canadian energy transaction in four years.
The sector has been battered by low oil prices and regulatory uncertainty. President Joe Biden’s cancellation of TC Energy Corp.’s Keystone XL oil pipeline in January added to doubts over the long-term prospects of Canada’s oil industry. Buying Inter will give Pembina additional pipeline infrastructure across Western Canada, connecting the region’s oil sands and natural gas producers with domestic and foreign customers. Pembina will also take on Inter’s Heartland Petrochemical Complex, which is under construction in Alberta. Inter has been looking for a partner to help fund the $4 billion construction cost.Article content
The takeover will lead to annual cost savings of as much as $200 million, the two Calgary-based companies said in a statement Tuesday. Pembina Chief Executive Officer Michael Dilger said his company has tried to buy Inter on two previous occasions.Pembina said its offer values Inter at $19.45 per share prior to the start of trading, while Brookfield’s offer was $16.50. Inter shareholders will own 28 per cent of the combined company, which will be run by Pembina’s senior executive team.
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