Pembina Pipeline Corp. has signed a deal to buy Kinder Morgan Canada Ltd. and the U.S. portion of the Cochin pipeline system in an agreement it valued at a total of about $4.35 billion.
Upon closing of the deal with Kinder Morgan Inc., Pembina says it will increase is monthly dividend by a penny per share to 21 cents.
The Cochin pipeline runs 2,900 kilometres between Fort Saskatchewan, Alta., and Chicago and has a design capacity of up to 110,000 barrels per day.
The deal also includes an Edmonton storage and terminal business and Vancouver Wharves, a bulk storage and export-import business.
Pembina is offering 0.3068 of a Pembina share per Kinder Morgan Canada share and class B unit. The acquisition is valued at approximately $2.3 billion including the assumption of Kinder Morgan Canada’s preferred shares and outstanding net debt.
In addition, Pembina is paying roughly $2.05 billion in cash for Kinder Morgan Cochin LLC, which holds Cochin US.
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