Two Canadian energy infrastructure companies have separately struck deals to grow assets.
Calgary-based Enbridge (NYSE:ENB) and AltaGas (TSX:ALA) have announced acquisitions of utilities and midstream assets, respectively, in the past month. Utilities and midstream can both be broadly classified as energy infrastructure, providing critical services that support energy demand.
See more: “Midstream/MLPs vs. Utilities: Key Investment Differences”
Enbridge last week announced the acquisition of three U.S.-based utilities in a deal with Dominion Energy valued at $14 billion. Enbridge will acquire to acquire the East Ohio Gas Company, Questar Gas Company and its related Wexpro companies, and Public Service Company of North Carolina (PSNC).
The three transactions will add gas utility operations for Enbridge in Ohio, North Carolina, Utah, Idaho, and Wyoming, representing a significant presence in the U.S. utility sector, according to a statement from the company.
The acquisitions will double the scale of Enbridge’s gas utility business to roughly 22% of the company’s total adjusted EBITDA. Furthermore, Enbridge’s gas distribution and storage business will be North America’s largest gas utility franchise, according to Enbridge.
The midstream and major pipeline company said the three transactions will further diversify Enbridge’s business, enhance stable cash flows, and strengthen its long-term dividend growth profile.
Access Enbridge With an Energy Infrastructure ETF
Enbridge is the second-largest holding in the Alerian Energy Infrastructure ETF (ENFR). ENFR provides exposure to the Alerian Midstream Energy Select Index (AMEI), a composite of North American midstream energy infrastructure companies. The index includes corporations and MLPs engaged in the pipeline transportation, storage, and processing of energy commodities.
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