Calgary-based Pembina Pipeline signs deal to buy Inter Pipeline for $8.3B

Oil pump on a sunset background. Getty Images

Pembina Pipeline Corp. has signed a deal to buy Inter Pipeline Ltd. for $8.3 billion in stock.

Under the deal, Inter Pipeline shareholders will receive half a Pembina share for each share of Inter Pipeline that they own.

The offer is valued at $19.45 per Inter Pipeline share based on the closing price of Pembina shares on Monday. Inter Pipeline shares closed at $17.55.

Read more: Pembina Pipeline to restart work on two key projects

The deal tops an offer for Inter Pipeline made by Brookfield Infrastructure Partners LP that was valued at $16.50 per share.

The boards of Pembina and Inter Pipeline have unanimously approved the deal which also requires approval by a two-thirds majority vote by Inter Pipeline shareholders. A majority vote by Pembina shareholders is also needed.

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Existing Pembina shareholders are expected to own 72 per cent of the combined company, while Inter Pipeline shareholders will hold 28 per cent.

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