After market close today, Canadian oil & gas midstream company Enbridge (TSE:ENB) (NYSE:ENB) announced that it will acquire three utility companies from Dominion Energy (NYSE:D). This US$14 billion deal, which encompasses a $9.4 billion cash payment and $4.6 billion of absorbed debt, will establish Enbridge as North America’s premier natural gas supplier and double its gas distribution business, according to the press release.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
To fund a part of this acquisition, Enbridge announced a bought-deal offering of common shares totaling C$4 billion at a price of C$44.70 per share. The news has resulted in ENB stock falling by over 6% in after-hours trading.
Nonetheless, Enbridge’s CEO, Greg Ebel, underscored the significance of this acquisition, highlighting the vital role natural gas will continue to play in a secure and dependable energy transition. Ebel referred to the assets as “must-have” infrastructure, indispensable in facilitating safe, affordable, and reliable energy solutions.
It’s a strategic move for Enbridge, as it brings a more balanced asset mix, shifting closer to a 50-50 split between natural gas & renewables and crude oil & liquids. The transaction, expected to close in 2024, will extend Enbridge’s reach to seven million customers across various states.
Is ENB Stock a Buy, According to Analysts?
According to analysts, ENB stock comes in as a Moderate Buy based on three Buys and six Holds assigned in the past three months. The average ENB stock price target of C$55.90 implies 16.1% upside potential.
