TC Energy Corp. is proceeding with its billion-dollar buyout of TC PipeLines LP after agreeing to raise its initial offer for the operator of natural gas pipelines in North America.

In a Dec. 15 release, Calgary, Alberta-based TC Energy said it entered an agreement and plan of merger to acquire all the outstanding common units of TC PipeLine in a transaction valued at about $1.68 billion. TC Energy already owns a 23.96% stake in TC PipeLines, according to Refinitiv data.

“The acquisition of TC PipeLines LP provides us with the opportunity to consolidate our ownership interest in eight FERC regulated natural gas pipelines that are an integral part of our overall North American network,” TC Energy President and CEO Russ Girling said in a statement. “In addition, completion of the transaction will serve to further simplify our corporate structure.”

The TC PipeLines portfolio of assets spans 22 states in the U.S. and includes interests in approximately 6,300 miles of natural gas pipelines and a combined total deliverable capacity of 10.9 Bcf/d, according to the company’s website.

Previously, TC Energy had offered to pay TC PipeLines shareholders about 0.650 common shares of TC Energy for each issued and outstanding publicly held TC PipeLines common unit.

Under the new agreement, TC PipeLines’ common shareholders would receive 0.70 common shares of TC Energy, which represents a 19.5% premium to TC PipeLines’ closing price as of Oct. 2, before the initial offer was made.

TC PipeLines Asset Map
TC PipeLines Asset Map (Source: TC PipeLines LP)

The deal is expected to close late first-quarter or early second-quarter 2021. Upon closing, TC PipeLines will become a wholly owned subsidiary of TC Energy and cease to be a publicly traded MLP.

J.P. Morgan Securities LLC is exclusive financial adviser to TC Energy for the transaction. Vinson & Elkins LLP is acting as its legal adviser.

Reuters contributed to this article.