TC Energy has received approval from its board of directors to split its business into two standalone, publicly listed companies through the separation of its liquids pipelines operations.
According to the Canadian energy infrastructure company, the decision follows a two-year strategic review and is aimed at unlocking shareholder value by enabling incremental growth and enhancing efficiencies.
Moreover, the move will give the newly formed companies the freedom to pursue their individual growth objectives by prudently allocating capital, boosting efficiencies, and achieving operational excellence.
Once the spinoff is finalised, it will lead to the creation of two distinguished energy industry leaders with high-quality standards and investment-grade credentials, said the company.
After the transaction, TC Energy’s primary focus will be on natural gas infrastructure. The company will also actively pursue power and energy solutions, particularly in the areas of nuclear, pumped hydro energy storage, and other emerging energy opportunities.
TC Energy president and CEO François Poirier said: “This transformative announcement sets us up to deliver superior shareholder value for the next decade and beyond. Fundamentals have always driven our strategic direction, and as a result, we have grown into a premier energy company with incumbency across a wide range of energy infrastructure platforms.
“As we have become the partner of choice for a magnitude of accretive, high-quality opportunities, we have determined that as two separate companies we can better execute on these distinct opportunity sets to unlock shareholder value.”
Post-transaction, TC Energy envisions becoming a diversified, major natural gas and energy solutions company, which is well placed to address the increasing demand for reliable, lower-carbon energy from both industries and consumers.
On the other hand, the liquids pipelines company is expected by TC Energy to play a vital role as a critical infrastructure provider. It will possess highly strategic assets that efficiently connect the robust and secure supply to the most demanding markets.
Additionally, the liquids pipelines firm will continue to explore opportunities for incremental growth and value creation within the domain.
The completion of the implementation is anticipated to occur in the second half of 2024, with the process being conducted on a tax-free basis.
Recently, TC Energy signed an all-cash deal worth around $4bn to sell a 40% stake in the Columbia Gas Transmission and Columbia Gulf Transmission pipeline systems in the US to Global Infrastructure Partners.
