Dominion Energy sells three U.S. natural gas distribution companies to Enbridge in $14b deal
Transactions - SEPTEMBER 11, 2023

Dominion Energy sells three U.S. natural gas distribution companies to Enbridge in $14b deal

by Kali Persall

Dominion Energy has concluded a robust, competitive sale process, executing three separate definitive agreements to sell its three natural gas distribution companies to Enbridge, a multinational pipeline and energy company headquartered in Calgary, Canada, in a $14 billion deal.

The transaction consisted of $9.4 billion of cash consideration and $4.6 billion of assumed debt, subject to customary closing adjustments.

The East Ohio Gas Company, Public Service Company of North Carolina and Questar Gas Co., along with Wexpro Company, serve about 3 million homes and businesses in Ohio, North Carolina, Utah, Wyoming and Idaho. They collectively comprise 78,000 miles of natural gas distribution, transmission, gathering and storage pipelines; more than 62 Bcf (billions of cubic feet) of working underground and liquefied natural gas storage capacity; and approximately 400 bcf equivalent (Bcfe) of cost-of-service regulated gas reserves, as of the end of 2022.

Enbridge said the acquisitions will double the scale of the company's gas utility business to approximately 22 percent of Enbridge's total adjusted EBITDA and balance the company's asset mix evenly between natural gas and renewables and liquids. Following the closings of the acquisitions, Enbridge's gas utility business will be the largest by volume in North America, with a combined rate base of more than C$27 billion ($20 billion).

In related news, Enbridge also closed its previously announced public offering of common shares by a syndicate of underwriters led by RBC Capital Markets and Morgan Stanley. BMO Capital Markets, CIBC Capital Markets, National Bank Financial Markets, Scotiabank and TD Securities are joint bookrunners.

Enbridge issued 102,913,500 common shares, including 13,423,500 common shares issued pursuant to the full exercise of the underwriters' overallotment option. Gross proceeds from the offering are approximately C$4.6 billion ($3.4 billion).

Enbridge plans to use the net proceeds from the offering to finance a portion of the aggregate cash consideration payable for the purchase of local distribution company gas utilities in the United States from Dominion Energy.

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