TransCanada, the company that proposed building the Keystone XL Pipeline, will purchase Columbia Pipeline Group for $13 billion.
A news release issued late Thursday from Columbia came after reports that TransCanada, which owns 42,500 miles of pipeline in North America, was seeking to take over the gas transportation company with more than 15,000 miles of pipeline that spans from the Gulf of Mexico to New York state.
Columbia Pipeline Group, which was spun off Indiana-based utility company Nisource last year, has extensive holdings in West Virginia, where it employs more than 700 people and operates around 2,500 miles of pipeline. The company is valued at roughly $9 billion.
The agreement has been unanimously approved by Columbia's Board of Directors, the release states.
TransCanada will pay $25.50 per share to Columbia holders, representing a 10.9 percent premium to Columbia's closing price on March 16. TransCanada will also assume about $2.8 billion of debt, the Calgary-based company said in a statement on Thursday.
"This transaction delivers tremendous value to our shareholders and places CPG within a leading energy platform that can maximize the value of our strategic positioning and deep inventory of transformational growth projects," CPG Chairman and Chief Executive Officer Robert C. Skaggs Jr. said in the release.
"The value presented here is a strong endorsement of our team's outstanding work. I am confident that this newly enhanced business will continue to deliver on our core commitments to customers, employees, stakeholders and stockholders."
"The acquisition represents a rare opportunity to invest in an extensive, competitively-positioned, growing network of regulated natural gas pipeline and storage assets in the Marcellus and Utica shale gas regions," said Russ Girling, TransCanada's president and chief executive officer, in the statement.
The deal gives TransCanada more than 15,000 miles of natural gas pipelines as well as underground storage and processing facilities owned and operated by Columbia. The acquisition would give TransCanada a position in the heart of the Marcellus shale play, potentially connecting rising volumes of cheap natural gas to its existing system.