Canadian energy company Enbridge has privatised its natural gas development business Midcoast Energy Partners (MEP), purchasing all outstanding public shares for a total of $170.2 million.
MEP, a midstream natural gas developer operating in the US, will cease to be a publicly traded partnership when the deal closes in the second quarter. Enbridge bought the outstanding common shares at $8 per share, representing a 5.5 percent premium as of 26 January. Enbridge's subsidiary, Enbridge Energy Partners, will own around 52 percent of MEP's shares.
Evercore served as financial advisor to MEP, and Bracewell acted as legal counsel. Citigroup acted as financial advisor to Enbridge.
MEP served as Enbridge's primary vehicle for owning and growing midstream natural gas assets in the US. It has a 51.6 percent stake in Midcoast Operating, a limited partnership that owns a network of natural gas transportation systems and treating facilities in Texas and Oklahoma.
For Enbridge, the deal is a consolidation following its $28 billion merger last year with Houston-based Spectra Energy. The deal created North America's largest energy infrastructure firm and increased Enbridge's enterprise value to around C$165 billion ($125.85 billion; €117.61 billion).
This deal was the latest in a string of energy mergers in 2016. Last September, Japan's JX Holdings and TonenGeneral Sekiyu KK agreed to create the country's largest oil refinery. France's Technip is also in the process of finalising a $13 billion merger with US group FMC technologies.