FORT ST. JOHN, B.C. – The 13 billion dollar US TransCanada Corporation takeover of the Columbia Pipeline Group has moved another major step closer to completion.
TransCanada has confirmed about 95% of the Columbia stockholders at a special meeting this week in Houston voted in support of the merger agreement.
The aforementioned purchase price includes assumption of about $2.8 billion dollars of debt and the Columbia stockholders support follows last month’s confirmation regulatory conditions necessary to close the deal had been satisfied.
TransCanada’s President and CEO, Russ Girling, says the shareholder vote moves his company closer to creating, “One of North America’s leading gas transportation and storage companies.”
He adds, “This acquisition provides TransCanada with a unique opportunity to invest in a proven, growth focused company with a competitively positioned and growing network of regulated natural gas pipeline and storage assets in the Appalachian region, the fastest growing production base in North America.”
The deal comes at a time when TransCanada continues to struggle to build new oil pipelines fighting both public and political concerns about their environmental impact and associated further reliance on fossil fuels.
The Energy East pipeline has run into major domestic political opposition, especially from the Quebec government, while last year the Obama White House rejected the Calgary based company’s proposed Keystone XL pipeline.
David Taylor, at Toronto’s Taylor Asset Management, gives suggestions that for Trans-Canada, this merger agreement really fills a project gap.
This acquisition gives TransCanada pipeline assets concentrated in the very lucrative gas play in the U-S northeast, where the two key basins involved have accounted for 90% of America’s total natural gas production since 2011.
In addition, there are portfolio management estimates now projecting 50% growth in production volumes from those same two basins in the next four years.