The leaders of Enbridge Inc. have signed a deal to buy Dominion Energy Inc.’s natural gas distribution businesses for $9.4 billion as well as the assumption of $4.6 billion in debt. If completed as expected next year, the transaction is set to make Enbridge the largest gas utility in North America.
Calgary-headquartered Enbridge plans to pay cash for the assets of Ohio Gas Co., Questar Gas Co. and Public Service Co. of North Carolina Inc., which operate a combined 78,000 miles of distribution, transmission, gathering and storage pipelines as well as storage facilities with more than 62 bcf of capacity. Combined, the businesses have about 3 million customers in Ohio, North Carolina, Utah, Idaho, and Wyoming and in 2022 generated net profits of $697 million on revenues of more than $3.3 billion.
Combining Enbridge’s presence in Ontario and Quebec with Dominion’s subsidiaries will yield a utility with 7,000 employees and 7 million customers delivering about 9.3 bcfd.
“The assets we are acquiring have long useful lives and natural gas utilities are ‘must-have’ infrastructure for providing safe, reliable and affordable energy,” Enbridge president and chief executive officer Greg Ebel said in a statement in which he also called this transaction a once-in-a-generation opportunity. “These businesses align with Enbridge’s business risk model and long-term growth targets.”
Ebel and his team expect Dominion’s natural gas utilities to add about $2 billion to Enbridge’s roughly $16 billion of adjusted EBITDA in 2025, the first full year they will be under the company’s umbrella.
Shares of Enbridge (Ticker: ENB) were down more than 5% to roughly $33.50 Sept. 6. Over the past 6 months, they have given up nearly 15% of their value, trimming the company’s market capitalization to about $68 billion.
