The Pembina Pipeline Corp. has acquired the U.S. portion of the Cochin Pipeline for $1.546 billion. In addition, Pembina has acquired all of the outstanding common equity of Kinder Morgan Canada Ltd. (KML).
Under the arrangement, Kinder Morgan Inc. (KMI) will receive .3068 shares of Pembina for each KML share it holds. This exchange ratio results in KMI receiving approximately 25 million shares of Pembina stock for KMI’s 70-percent interest in KML, which equates to slightly less than 5 percent of Pembina’s common equity.
KMI intends to use the proceeds from the Pembina transactions to pay down debt, creating approximately $1.2 billion of balance sheet/borrowing flexibility in 2020.