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AltaGas buying U.S.-based power and pipeline company in $8.4B deal

A file photo of AltaGas’ Townsend facility.
A file photo of AltaGas’ Townsend facility. CREDIT: AltaGas Ltd.

AltaGas Ltd. is buying U.S. power and utility company WGL Holdings Inc. in a deal worth C$8.4-billion as it looks to expand and diversify its energy infrastructure portfolio in North America.

To pay for the deal, the Calgary-based company (TSX:ALA) has also announced $2.5 billion in financing, and plans to offer debt, preferred shares and some asset sales.

Washington, D.C.-based WGL Holdings owns extensive pipeline and midstream energy assets that AltaGas says is complimentary to its own network.

READ MORE: AltaGas in potential deal talks with WGL Holdings: report

WGL is also the parent company of natural-gas utility Washington Gas, which supplies the U.S. capital region, and owns clean power assets and natural gas generation facilities in the U.S.

Under the terms of the agreement, WGL shareholders would receive US$88.25 in cash per WGL share, which represents an 11.8 per cent premium to WGL’s closing share price on Tuesday.

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AltaGas says the transaction represents a total value of C$8.4 billion, including the assumption of approximately C$2.4 billion of debt.