OTTAWA (dpa-AFX) - Enbridge Inc. (ENB, ENB.TO) on Wednesday announced that it has agreed to acquire Tallgrass Energy's crude oil business for $2.55 billion in cash, expanding its crude transportation footprint across the U.S. Rockies and strengthening its North American liquids pipeline network.
The acquired business includes a 75% interest in Pony Express Pipeline, a 1,050-mile crude system with approximately 460 kbpd of capacity connecting Rockies production to Cushing, Oklahoma.
It also includes a 51% interest in the Powder River Gateway system, about 8.4 million barrels of crude storage capacity across nine terminals, and Stanchion Energy, a crude marketing business.
The transaction represents an estimated acquisition multiple of 10-11x forward enterprise value to EBITDA, Enbridge said.
The company expects the assets to generate significant free cash flow and provide opportunities for future growth and operational synergies. Pony Express is highly contracted through the decade, primarily with investment-grade counterparties.
Enbridge expects the deal to be accretive to distributable cash flow per share in the first full year of ownership, although its 2026 financial guidance is not materially impacted due to the expected late-year closing.
The transaction is expected to close later in 2026, subject to regulatory approvals and other customary conditions. Enbridge reaffirmed its medium-term outlook for approximately 5% compound annual growth in EBITDA, DCF per share and EPS.
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