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Enbridge to Buy Tallgrass' Crude Business for $2.55 Billion; Launches CA$2.6 Billion Bought-Deal Offering

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Enbridge (ENB.TO, ENB) said Wednesday it agreed to acquire Tallgrass Energy's crude oil business for US$2.55 billion in cash through a wholly owned subsidiary.

The assets include a 75% interest in the Pony Express Pipeline, a 1,050-mile crude system with capacity of about 460,000 barrels per day connecting Rockies production to Cushing, Oklahoma, and a 51% interest in the Powder River Gateway system, which includes two pipelines with combined capacity of about 240,000 barrels per day.

Enbridge will also acquire about 8.4-million barrels of storage capacity across nine crude terminals connected to Pony Express, including a 60.3% non-operating interest in the Deeprock Crude Terminal in Cushing.

The transaction is expected to close later this year.

Enbridge plans an equity offering to partially fund the Tallgrass acquisition and its previously announced acquisition of Salt Creek Midstream's crude gathering business, as well as provide flexibility for future growth. The company is

raising CA$2.6 billion through a bought-deal offering of 38.9-million shares at CA$66.85 each.

Enbridge dropped $1.24 to $48.91 in US after-hours trading after closing down CA$0.41 to CA$69.28 on Toronto Stock Exchange.

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