Inter Pipeline will pay termination fee of $278m to Pembina. Credit: Johannes Rupf from Pixabay.

Pembina Pipeline has terminated a $6.76bn (C$8.5bn) deal to acquire rival Canadian firm Inter Pipeline (IPL), which would have created one of the largest energy infrastructure firms in Canada.

The move clears a path for IPL to pursue a higher bid offer of $6.85bn (C$8.58bn) in cash or stock from an affiliate of Brookfield Infrastructure Partners made earlier this month.

Related Company Profiles

View all

Brookfield’s latest offer, which was eventually hiked from the initial unsolicited bid of $6.2bn (C$7.8bn) in February 2021, values Inter Pipeline at $16.90 (C$21.23) per share.

This revised offer represents a premium of $1.21 (C$1.53) or 8% compared with Pembina Pipeline’s offer of $15.60 (C$19.70) per share as of 14 July 2021.

As a result of the termination of the arrangement agreement, which is effective from 25 July 2021, Inter Pipeline has agreed to pay termination fee of $278m (C$350m) to Pembina.

In a press statement, Inter Pipeline said: “Inter Pipeline’s Board of Directors is open to engaging with Brookfield in an effort to reach a mutually agreeable transaction in the best interests of shareholders.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“Inter Pipeline will be in a position to make a formal recommendation on the Revised Brookfield Offer in due course.

After rejecting Brookfield’s previous bids, Inter signed the takeover deal with Pembina in May 2021 following a strategic review over a four-month period.

Under the deal, Inter Pipeline shareholders would have received half a share in the Pembina Pipeline for each share held.

Pembina Pipeline’s shareholders would have owned a 72% stake in the combined firm while Inter Pipeline shareholders would have held the remaining 28% stake.

Commenting on the deal termination, Pembina CEO Mick Dilger said: “While we are disappointed with this outcome, we will continue to seek opportunities for growth through focused acquisitions.”