TransCanada Pipelines Ltd. agreed Monday to buy Nova Corp. for stock valued at $4.91 billion to compete better with big U.S. rivals in the business of distributing natural gas through pipelines.
The combined company will have 22,000 miles of natural gas pipelines, second only to Russia’s Gazprom, and combined revenue of more than $11 billion.
TransCanada will spin off Nova’s petrochemicals business, a low-cost producer with annual sales of more than $2.3 billion.
The companies said last week that they were in talks.
TransCanada and Nova already distribute most of the natural gas in Canada and want to expand in the U.S. and overseas.
They face increasing competition at home from U.S. companies, including Duke Energy Corp. and Enron Corp., which are investing in pipelines to carry Canadian natural gas to the U.S.
