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Pembina To Buy Provident Energy For $3.1 Billion

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Preston Waters

Pembina Pipeline Corp. has agreed to buy Provident Energy Ltd. PVX -0.54% for about C$3.2 billion (US$3.1 billion) in stock, creating a publicly traded Canadian energy infrastructure company with a market captitalization of nearly C$8 billion.

In a joint release early Monday, the Calgary-based companies said Provident shareholders will get 0.425 of a Pembina share for each share held, which, based on Pembina’s C$27.90 closing price in Toronto Friday, is a premium of 24.7% over Provident’s C$9.51 close.

The companies expect the deal to immediately boost Pembina’s cash flow per share, increase its dividends and reduce its dividend payout ratio.

On closing, the combined company — which will retain the Pembina name — will be led by Bob Michaleski, president and chief executive of Pembina, and a combination of the executive teams of both companies.

The boards of both companies support the deal and are expected to recommend their shareholders vote in favor of the arrangement.

Market Watch

Preston Waters

Preston Waters

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