Enbridge agrees to acquire Spanish transportation, storage business
Nov 28, 2001 12:00 PM
Enbridge Inc, Calgary, Alberta, Canada, has agreed in principle to acquire a 25 percent stake in Compania Logistica de Hidrocarburos (CLH) SA, Spain's largest refined products transportation and storage business.
The principal terms of the agreement, which is expected to be finalized shortly, will include the acquisition of 25 percent of the common shares of CLH for approximately Canadian $530 million (US $333 million). The acquisition is expected to be accretive to earnings per share, beginning in 2002.
"We are very pleased to have agreed on the purchase of a significant interest in CLH," said Pat Daniel, Enbridge president and chief executive officer. "The CLH assets are consistent with our international strategy and represent what we do best, which is to provide energy transportation solutions to our customers, both in North America and internationally. This is a blue chip investment within the European Union that provides an attractive return and significant earnings contribution, as well as growth opportunities related to future liberalized infrastructure development in Spain and other European markets.
"This investment demonstrates the progress we've made on our goal to position Enbridge as a partner of choice for global energy players. Our objective is to leverage our expertise in infrastructure operations into the right international opportunities."
CLH is a Spanish logistics company in refined products. It owns and operates a pipeline network and storage facilities on the Spanish mainland and Balearic Islands. CLH operates a total of more than 3,400 kilometres of products pipelines, 37 products storage facilities with 38 million barrels of capacity, nine marine tankers, and 130 road tanker trailers.
Upon closing, it is expected that Enbridge and Repsol YPF will each own 25 percent of CLH; CEPSA will own 15 percent while BP and Shell will own 5 percent each. Other shareholders yet to be identified are expected to acquire the remaining approximate 24 percent of CLH.
Enbridge will have a significant role in management of CLH through board representation, appointment of management positions, and potentially through the provision of technical and advisory services.
The acquisition is subject to final due diligence, execution of
the Purchase and Shareholder Agreements and other customary closing
conditions. The transaction is anticipated to close in the first
quarter of 2002, with an effective date of January 1, 2002.