TransCanada, the company behind the controversial Keystone XL oil pipeline, said on Thursday it will buy Columbia Pipeline Group for $10.2 billion, creating one of North America's largest regulated natural gas transmission businesses.
The deal, valued at $13 billion including debt, comes months after U.S. President Barack Obama blocked the cross-border Keystone XL crude pipeline. His decision was a victory for environmentalists and a blow to TransCanada after a seven-year battle for approval.
TransCanada will offer $25.50 per share in cash for each Columbia Pipeline share, an 8.5 percent premium to the stock's Thursday close.
Columbia Pipeline shares rose about 5 percent in extended trading, while TransCanada's U.S.-listed shares were down more than 8 percent.