Canadian-based Enbridge Energy agreed on Tuesday to buy Texas-based Spectra Energy for $28 billion, potentially creating the largest North American energy-infrastructure company.
The companies announced the merger jointly, and the boards of both companies are fully supportive of the deal.
Under the deal, Spectra Energy shareholders will receive Enbridge shares valued at $40.33 each based on the closing price on Friday.
Enbridge shareholders will own roughly 57 percent of the combined company, which will be called Enbridge Inc., and Spectra Energy shareholders will own the other 43 percent.
Al Manaco, Chief Executive Officer of Enbridge Energy, will continue his role with the merger while Spectra Energy Chief Executive Officer Greg Ebel will become a nonexecutive chairman.
The merger is estimated to save the companies about $415 million in costs. The deal is expected to close in the first quarter of 2017.