AltaGas to buy WGL in C$8.4 billion deal in gas distribution push

Wed Jan 25, 2017 6:21pm EST
 
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(Reuters) - Canadian energy infrastructure company AltaGas Ltd (ALA.TO: Quote) said it would buy U.S.-based WGL Holdings Inc (WGL.N: Quote) in a deal valued at C$8.4 billion ($6.42 billion), the latest company pushing deeper into natural gas distribution.

AltaGas will offer WGL Holdings shareholders $88.25 per share held, a 12 percent premium to the stock's Wednesday close.

WGL Holdings's shares were trading at $81.60 in after-market trading.

WGL Holdings, the parent of natural-gas utility Washington Gas, provides natural gas services in Maryland, Virginia and the District of Columbia.

The company also has a retail energy-marketing business and operates natural-gas distribution facilities.

AltaGas's deal for WGL follows Dominion Resources Inc's (D.N: Quote) $4.4 billion buyout of Questar Corp STR.N last year.

Duke Energy Corp (DUK.N: Quote), the largest U.S. power company by generation capacity, said in 2015 it would buy Piedmont Natural Gas Co PNY.N for $4.9 billion.

Energy firms are betting on natural gas distribution, given rising demand from homes and businesses, and to help offset shrinking profits at utility businesses due to waning power demand.

Calgary-based AltaGas, which operates in the United States and Canada, has three businesses - natural gas gathering and processing, power generation and utilities that deliver natural gas to homes and businesses.   Continued...