Canadian energy infrastructure company AltaGas has signed an agreement to acquire US-based WGL Holdings for C$8.4bn ($6.42bn), including debt, in a bid to strength its natural gas distribution business.
WGL Holdings, which owns natural-gas utility Washington Gas, is engaged in providing natural gas, electricity, green power and energy services.
Under the terms of the deal, WGL Holdings shareholders will receive $88.25 per share held from AltaGas.
AltaGas president and CEO David Harris said: "This acquisition provides us with a robust, complementary set of energy businesses that greatly increase our scale and diversity.
WGL Holdings expects the combined company to have an enterprise value of approximately $17bn with natural gas rate base assets of approximately $3.4bn.
Upon completing of the deal, AltaGas will have over C$7bn worth of diversified growth portfolio in low-risk, investment opportunities.
Harris added: "The strategic fit and compatibility of our two companies is exceptional. Both companies are strong utility operators, have a sweet spot of pipeline and midstream investments in premier supply basins, and have power generation businesses weighted to clean energy and innovations.
"We can also deploy capital for future growth in all lines of business with greater scope, scale, talent, access to capital and consistent strategy.”
Additionally, WGL's natural gas utility will continue to be regulated by commissions in the District of Columbia, Maryland, and Virginia. It will be operated under the Washington Gas brand.
The transaction, which is planned to be completed by the end of the second quarter of 2018, is subject to certain closing conditions, including WGL common shareholder approval and certain regulatory and government approvals.
Image: AltaGas intends to strength its natural gas distribution business. Photo: courtesy of Tuelekza/FreeDigitalPhotos.net.