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TC Energy Corporation (TSX, NYSE: TRP) announced today that its shareholders have approved the spinoff of the company’s Liquids Pipelines business. This decision was made during the 2024 annual and special meeting of shareholders, where the election of TC Energy’s Board of Directors also took place.
Shareholder Approval and Key Details
TC Energy shareholders voted in favor of the Arrangement Resolution, which includes the distribution of one new common share of TC Energy and 0.2 of a common share in a newly formed public company named South Bow Corporation (South Bow), in exchange for each common share of TC Energy held. This approval is a significant milestone that allows TC Energy and South Bow to proceed with their planned separation.
Timeline and Strategic Benefits
The separation is anticipated to be completed between late-third quarter and mid-fourth quarter of 2024. TC Energy's Board of Directors and management team believe that this spinoff will enhance long-term value for shareholders by creating two independent, investment-grade, publicly listed companies. Each entity will have the flexibility to implement tailored strategies designed to address specific customer needs and market opportunities, potentially achieving greater success as separate entities than as a combined organization.
Regulatory and Tax Approvals
The spinoff has already received the necessary tax rulings in both Canada and the United States. However, it still requires regulatory and court approvals, along with the fulfillment of other customary closing conditions.
Management’s Perspective
TC Energy's leadership is confident that the proposed separation will provide significant benefits. By dividing into two distinct entities, each company can focus on its unique value propositions and operational strategies. This move is expected to unlock shareholder value and position both TC Energy and South Bow for future growth and success.
Next Steps
As the separation process progresses, both companies will work towards meeting the remaining regulatory and court requirements. The leadership teams of TC Energy and South Bow are committed to ensuring a smooth transition and continued operational excellence during this period.
