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Pembina Pipeline Corp said it would buy smaller rival Veresen Inc in a stock and cash deal valued at $9.7 billion, including debt, giving the Canadian pipeline operator access to natural gas pipelines and processing infrastructure.The combined company will have a strong position in the Western Canadian Sedimentary Basin, home to the world third largest crude reserves.A rebound in oil prices from a two year slump and prospects of friendlier regulatory and tax policies in the United States are stoking consolidation in the pipeline industry.Next battleground: Enbridge's aging Great Lakes pipeline stirs new protest in MichiganOilsands Canadianization has aligned interests, says Suncor Energy CEO Steve Williams'We never had it so good': Canadian investor Adam Waterous is an optimist about energyPembina deal for Veresen comes in the wake of Enbridge Inc US$28 billion acquisition of Spectra Energy, announced in September, and TransCanada Corp US$10 billion purchase of Columbia Pipeline Group in March last year.After the deal with Veresen, Pembina will own about 5.8 billion cubic feet per day of gas cheap iphone Cases processing infrastructure across Western Canada by 2018.Pembina portfolio includes an oil sands and heavy oil unit that operates about 1,650 kilometers of pipeline with capacity of about 975,000 barrels per day.The company also has a 10,000 kilometre oil pipeline network, including expansions in the works, extending across Alberta and parts of British Columbia, Saskatchewan and North Dakota.Veresen pipeline business made up over half of its asset base at 2016 end and has a stake in a pipeline delivering natural gas and NGL from Alberta, British Columbia and the midwest United states to the West CoastIt also holds interest in a 680 mile natural gas pipeline extending from Wyoming to Oregon, and owns the Alberta Ethane Gathering System, which is made up of three interconnected pipelines.Pembina said Veresen shareholders could opt to get either 0.4287 of a Pembina share or $18.65 in cash.The offer is at a 22.5 per cent premium to Pembina last close, the companies said.Pembina said it would pay as much as about $1.52 billion in cash and 99.5 million in shares.The company also said it would increase its dividend by 5.9 per cent upon deal close expected late third quarter or early fourth quarter.CIBC World Markets Inc is Pembina financial adviser. Blake, Cassels Graydon LLP and Bracewell LLP are its legal advisers. Scotiabank is advising Veresen, while Osler, Hoskin Harcourt LLP is providing legal counsel.
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