The US energy company Duke Energy is to acquire the Canadian company Westcoast Energy for $8.5 billion in cash, stock and the assumption of debt. The purchase, a significant acquisition of gas transmission assets, will help expand Duke’s natural gas business. The deal is expected to be completed in the first quarter of 2002, provided that the necessary approval from existing shareholders in Westcoast Energy and Canadian regulatory bodies is forthcoming..

Westcoast Energy runs gas gathering, processing, transmission and storage businesses with assets including 29 000 km of transmission pipe and 25 000 km of distribution pipeline. Under the terms of the deal, Duke will use a mixture of cash and stock to finance the transaction and will acquire all outstanding common shares in Westcoast. Fifty per cent of the offer is in cash and the other 50 per cent involves swapping Duke common shares and exchangeable shares of a Duke subsidiary in Canada.

Duke expects the deal to be completed during the first quarter of 2002 and expects it to be an immediate source of revenue, increasing projected annual growth earnings by some 7-9 per cent.