TransCanada Closes ANR Acquisition and Expands North American Reach
TransCanada Corporation has closed the acquisition of American Natural Resources Company and ANR Storage Company (collectively, ANR) and an additional 3.55 per cent interest in Great Lakes Gas Transmission Limited Partnership (Great Lakes) from El Paso Corporation. The total purchase price is US$3.4 billion, subject to certain post closing adjustments, and includes US$488 million of assumed debt.
"With the acquisition of ANR, TransCanada's wholly owned natural gas pipeline network extends more than 59,000 kilometres and offers our customers unparalleled connections from traditional and emerging supply basins to growing North American markets," said Hal Kvisle, TransCanada's chief executive officer. "By acquiring more than 230 billion cubic feet of natural gas storage capacity, TransCanada has interests in approximately 360 billion cubic feet of storage capacity, making us one of North America's largest gas storage operators."
These high quality, regulated assets are a strong fit with TransCanada's existing North American portfolio, and strengthen our position as a leader in the North American gas transmission business. The assets are expected to deliver significant value for shareholders. TransCanada expects the acquisition to be accretive to earnings in 2007.
The acquisition was financed through a $1.5 billion Subscription Receipts offering that closed on February 14, 2007; cash on hand; and funds drawn on newly established bridge and term loan facilities. With the closing of the ANR acquisition, the escrow release condition for the Subscription Receipts has been met, the transfer register for the Subscription Receipts will close at 22 February 2007 5:00 p.m. (local time in Calgary and Toronto), and the Subscription Receipts will automatically be exchanged on a one-to-one basis for TransCanada common shares through the facilities of The Canadian Depository for Securities Limited effective as of February ss, 2007.
In connection with the offering of the Subscription Receipts, TransCanada granted the underwriters of the Subscription Receipts offering an option to purchase an additional 5,920,500 common shares at a price of $38.00 per common share at any time up to and including March 16, 2007.
Lee Hobbs has been appointed Vice President and General Manager, U.S. Pipelines Central. Based in Houston, he will be responsible for the operation of ANR and Great Lakes. A new executive leadership team has been selected for ANR and Great Lakes which includes executives from TransCanada, ANR and Great Lakes, providing a breadth and depth of valuable industry experience.
In a separate transaction, TC PipeLines, LP (the Partnership) has announced it has closed the acquisition of a 46.45 per cent interest in Great Lakes from El Paso for approximately US$962 million, subject to certain closing adjustments, including US$212 million of assumed debt. TransCanada is the General Partner and owns approximately 32 per cent of the Partnership.
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