UPDATE 3-TransCanada to buy Columbia Pipeline Group for $10.2 bln
* Deal valued at $13 bln including $2.8 bln in debt
* Offers $25.50/Columbia Pipeline share
* Offer at 8.5 pct premium to Columbia Pipeline's Thursday close
* Plans to fund deal with asset sales, debt (Adds new TransCanada comment)
CALGARY, Alberta, March 17 (Reuters) - TransCanada Corp , the company behind the controversial Keystone XL oil pipeline, said on Thursday it will buy Columbia Pipeline Group for $10.2 billion, creating one of North America's largest regulated natural gas transmission businesses.
The deal, valued at $13 billion including debt, comes months after U.S. President Barack Obama blocked the cross-border Keystone XL crude pipeline. His decision was a victory for environmentalists and a blow to TransCanada after a seven-year battle for approval.
TransCanada will offer $25.50 per share in cash for each Columbia Pipeline share, an 8.5 percent premium to the stock's Thursday close.
Columbia Pipeline shares were at $24.75 in extended trading, while TransCanada's U.S.-listed shares were down nearly 4 percent at $36.50.
Columbia Pipeline owns and operates about 15,000 miles of natural gas pipelines, connecting the U.S. Gulf Coast to the Midwest, Mid-Atlantic and Northeast United States, home to some of the country's most prolific shale gas plays. Continued...