Pembina and KKR agree to merge Western Canadian processing assets
Torys is acting as counsel to KKR with a team that includes Derek Flaman, Peter Danner, Amy Maginley, Matthew McMahon, Jessie Mann, Paul Grenon and Tanis Makowsky (corporate/M&A), Kevin Fougere (financing), Craig Maurice and Steve Marshall (tax), Omar Wakil and Ian Li (competition), Tom Stevenson (employment), Andrew Bedford (real estate) and Gino Bruni (energy regulatory).
On March 1, 2022, Pembina Pipeline Corporation ("Pembina") and KKR announced the signing of definitive agreements to combine their respective western Canadian natural gas processing assets into a single, new joint venture entity ("Newco"), which will be owned 60% by Pembina and 40% by KKR's global infrastructure funds. Pembina will serve as the operator and manager of Newco.
As part of the transaction, Pembina will contribute its wholly owned field-based gas processing assets to Newco, which includes the Cutbank Complex, the Saturn Complex, the Resthaven Facility, the Duvernay Complex and the Saskatchewan Ethane Extraction Plant, as well as its 45% interest in Veresen Midstream. KKR will contribute a 55% interest in Veresen Midstream and a 49% interest in Energy Transfer Canada ("ETC"). Concurrent with the joint venture, Newco also agreed to acquire the remaining 51% interest in ETC from Energy Transfer LP, which is expected to be completed concurrently with the closing of the other transactions.
Collectively, the ascribed value of these transactions totals approximately C$11.4 billion, excluding the value of assets under construction.
The contribution of Pembina's and KKR's assets to Newco, and Newco's acquisition of 51% of ETC from Energy Transfer LP, are cross-conditional upon each other and will occur concurrently. Closing is expected to occur late in the second quarter or third quarter of 2022, subject to approval under the Competition Act (Canada) and other customary closing conditions.
Further information can be found on Canada Newswire’s website.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions.
Pembina is a leading energy transportation and midstream service provider that has served North America's energy industry for more than 65 years. Pembina owns an integrated network of hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and a growing export terminals business.