$8.5 billion worth of energy
21 Sep 2001
Duke Energy plans to expand its position in the North American natural gas marketplace by acquiring Westcoast Energy in a cash and stock transaction valued at approximately $8.5 billion, including debt assumed.
The transaction provides for the acquisition of all outstanding common shares of Westcoast Energy in exchange for a combination of cash, Duke Energy common shares and exchangeable shares of a Canadian subsidiary of Duke Energy, such that 50 percent of the consideration will be paid in cash and 50 percent will be paid in stock.
The transaction is intended to provide Westcoast Energy shareholders with approximately Cdn$43.80 per share in value, subject to a collar. Duke Energy believes that the acquisition can be completed during the first quarter of 2002.
When the transaction is completed, Westcoast Energy's natural gas assets - its primary business - will be operated by Houston-based Duke Energy Gas Transmission (DEGT). Westcoast Energy's energy services and international businesses will be operated by Duke Energy's Energy Services' business units.
DEGT's Canadian operations will be headquartered in Vancouver.
The combined natural gas-related assets will include about 18,900 miles of transmission pipeline; 241 billion cubic feet of natural gas storage; 58,700 miles of gathering pipeline; 84 processing facilities; and 16,500 miles of distribution pipeline.
In addition to the wholly owned pipeline systems of DEGT (Texas Eastern Transmission, Algonquin Gas Transmission and East Tennessee Natural Gas) and of Westcoast Energy (BC Pipeline, Empire State Pipeline and Union Gas Transmission), the combined company will have ownership interests in the Maritimes & Northeast Pipeline (75 percent), Gulfstream Natural Gas System (50 percent), Foothills Pipe Lines (50 percent), Vector Pipeline (30 percent) and Alliance Pipeline/Aux Sable (23.6 percent).
