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Pembina and Inter Pipeline to Combine Highly Integrated and Complementary Businesses to Accelerate Long - term Strategic Plan All financial figures are approximate and in Canadian dollars unless otherwise noted . This news release refers to adjusted earnings before interest , taxes , depreciation and amortization ( " adjusted EBITDA " ) , and adjusted cash flow from operating activities ( " adjusted cash flow " ) , which are financial measures that are not defined by Generally Accepted Accounting Principles ( " GAAP " ) . For more information about these metrics , see " Non - GAAP Measures " herein . CALGARY , AB , June 1 , 2021 / CNW / - Pembina Pipeline Corporation ( TSX : PPL ) ( NYSE : PBA ) ( " Pembina " ) and Inter Pipeline Ltd. ( TSX : IPL ) ( " Inter Pipeline " ) announced today that they have entered into an arrangement agreement for Pembina to acquire all of the issued and outstanding shares of Inter Pipeline in a share - for - share transaction ( the " Transaction " ) , which values Inter Pipeline common shares at approximately $ 8.3 billion , or $ 19.45 per share , based on the closing price of Pembina's common shares on May 31 , 2021 . The Transaction will create one of the largest energy infrastructure companies in Canada , with a pro forma enterprise value of $ 53 billion and a diversified and integrated asset base that can support and grow an extensive value chain for natural gas , natural gas liquids and crude oil , from wellhead to end user . Furthermore , past and future investments by both companies will help access new demand markets for the Western Canadian Sedimentary Basin ( " WCSB " ) , benefitting Pembina , its customers and the provinces of Alberta and British Columbia alike . Key Highlights • Combination of highly connected and complementary assets , resulting in greater vertical integration , expanded customer service offerings , and enhanced global market reach to maximize the value of products produced in the WCSB . • Near - term synergies of $ 150 to $ 200 million annually , which are expected to immediately contribute to meaningful adjusted cash flow per share accretion upon closing of the Transaction . • Once the Heartland Petrochemical Complex ( " HPC " ) is in full service , the combined company is expected to generate $ 1.1 billion to $ 1.4 billion of adjusted cash flow from operating activities after dividends annually , greatly enhancing its ability to fund existing and future capital investment . • Combination will accelerate and de - risk accretive investment opportunities across various value chains , allowing for deployment of capital into projects at attractive rates of return . In addition to the projects currently under construction , the combined company has visible and highly probable unsanctioned investment opportunities in excess of $ 6 billion . • Strong financial platform , in adherence with Pembina's financial guardrails , with the addition of significant long - term contracted cash flow and long - lived underlying assets to Pembina's existing strong foundation . • Pembina's monthly dividend to increase by $ 0.01 per share , or 4.8 percent , to $ 0.22 per share following closing of the Transaction . Following the successful commissioning and in - service of HPC , currently expected in 2022 , incremental cash flow from the project is expected to support a further increase to the monthly dividend of an additional $ 0.01 per share , to $ 0.23 per share . • Shared commitment to Environmental , Social and Governance ( " ESG " ) priorities including investments that reduce the combined company's emissions intensity to contribute to a lower carbon economy . Incremental opportunities available to the combined company to be advanced in due course , prior to closing . • Inter Pipeline shareholders will benefit immediately from an offer that provides a premium to the current trading price , an immediate 175 percent increase to their monthly dividend upon closing , and by sharing in the synergies and enhanced growth potential arising from the combined company . Key operational metrics for the combined entity are as follows : Pembina Inter Pipeline Pro Forma Pipeline Capacity Processing Capacity Fractionation Capacity Storage Capacity ( excluding Europe ) Polypropylene Capacity1 1. Upon in - service of HPC 2.7 Bcf / d 3.1 mmmboe / d 6.1 Bcf / d 350,000 Bpd 3.1 mmboe / d 40,000 Bpd 32 million barrels 6 million barrels 6.2 mmboe / d 8.8 Bcf / d 390,000 Bpd 38 million barrels 525,000 tonnes / year " The Transaction is highly strategic for both Pembina and Inter Pipeline , providing clear visibility to creating long - term sustainable value for our respective shareholders , " said Randy Findlay , Pembina's Chair of the Board of Directors . " It represents a compelling opportunity to continue building on our respective low- risk , long - term , fee - for - service business model , expand our customer service offerings , and create significant value through the realization of synergies , vertical integration and high return growth opportunities . Pembina's strategy of maximizing the value of its products through global market access is strengthened with the addition of HPC , which will allow us and our customers to benefit from additional margin capture . A core part of our strategy is the commitment to ESG , including making investments to enhance the long - term sustainability of our business and reducing the carbon intensity of what we do . " Margaret McKenzie , Inter Pipeline's Chair of the Board of Directors , commented , " After a comprehensive review of strategic alternatives by the Special Committee of the Board of Directors of Inter Pipeline , it was evident that a combination with Pembina offered compelling value for Inter Pipeline shareholders in the short - term , as well as the opportunity to participate in the upside of HPC and the combined business longer - term . " Ms. McKenzie went on to add , " The creation of a more highly integrated business across the energy infrastructure value chain results in a combined entity that is greater than the sum of its parts . The combined asset suite , financial strength , and operational foundation , makes us highly confident that the Transaction will translate into significant value for all stakeholders , both immediately and into the future . " Transaction Overview Under the terms of the Transaction , Inter Pipeline shareholders will receive 0.5 of a share of Pembina for each share of Inter Pipeline that they own . The consideration to be received by Inter Pipeline shareholders is valued at $ 19.45 per Inter Pipeline share based on the closing price of Pembina common shares on May 31 , 2021 , which represents a premium of approximately 17.8 percent to the value implied by the takeover bid announced by Brookfield Infrastructure Corporation . The Transaction is valued at approximately $ 15.2 billion , including the assumption of Inter Pipeline's debt . Pembina and Inter Pipeline shareholders are expected to own 72 percent and 28 percent of the combined company , respectively . The combined entity will continue to be led by Pembina's senior executive team . Representation from Inter Pipeline on Pembina's board of directors will be determined prior to closing of the Transaction . Transaction Rationale • Integrated Asset Base : The majority of the combined asset base is already physically connected or presents the opportunity to be connected with relative ease in the future , which will allow for operational integration , the potential to realize significant immediate synergies and enhanced customer service . Expanded Customer Service Offerings : Customers are expected to benefit from lower costs through economies of scale , the conversion of their products into higher value materials , such as converting propane to polypropylene , and by gaining access to higher value markets both locally and globally . • • Creates the Leading Integrated Condensate Delivery Solution in Western Canada : Pembina is the largest gatherer of condensate in the WCSB through the Peace Pipeline and Drayton Valley pipeline systems and one of two importers of condensate through Cochin Pipeline . Inter Pipeline is the leading deliverer of condensate to consuming regions through its multi - line condensate delivery system . By combining Pembina and Inter Pipeline's complementary network of receipt and delivery pipelines , the combined company will be able to offer a ' one - stop - shop ' for integrated customers who wish to utilize the condensate they produce in one location of the WCSB and connect it for use in another location . • De - risking and Enhancing Value of HPC : By combining HPC with Pembina's industry leading 60,000 bpd of propane supply infrastructure in Fort Saskatchewan , long - term supply risk for HPC is eliminated , while further improving the possibility of a second such facility . • Meaningful Synergies Through Combination : On a run - rate basis , pre - tax synergies are expected to average $ 150 to $ 200 million annually . Approximately $ 100 to $ 150 million of annual synergies will come from lower general , administrative and operating costs , and are expected to be realized in the first year