TC PipeLines is a Delaware master limited partnership, which was formed by TransCanada PipeLines, a wholly-owned subsidiary of TC Energy
Canadian energy company TC Energy has agreed to acquire the remaining shares that it does not own in TC PipeLines for approximately $1.68bn.
The latest move follows an offer made by the company to acquire all the outstanding common units of TC PipeLines for $1.48bn in October this year.
Under the terms of the definitive agreement, the energy company will acquire the common units of TC PipeLines which are not beneficially owned by the company or its affiliates in exchange for its common shares.
For the deal, TC PipeLines common shareholders will receive 0.70 common shares of TC Energy for each issued and outstanding publicly-held its common unit. This represents a 19.5% premium to the TCP closing price before the original offer as of 2 October 2020.
TC PipeLines is a Delaware master limited partnership, which was formed by TransCanada PipeLines, a wholly-owned subsidiary of TC Energy.
It operates across the US and delivers energy into several major markets, including the Pacific Northwest, Northeast US and Midwest.
The deal, subject to approval by the holders of a majority of outstanding common units of TCP and customary regulatory approvals, is expected to be concluded in the first quarter or early in the second quarter of 2021.
Upon completion of the transaction, TC PipeLines will be wholly-owned by TC Energy and will be a publicly-held master limited partnership.
TC Energy president and CEO Russ Girling said: “The acquisition of TC PipeLines, LP provides us with the opportunity to consolidate our ownership interest in eight FERC regulated natural gas pipelines that are an integral part of our overall North American network.
“In addition, completion of the transaction will serve to further simplify our corporate structure.”
J.P. Morgan Securities is serving as exclusive financial advisor and Vinson & Elkins as legal advisor to TC Energy for the deal.