DTE Energy announces intent to spin-off DTE Midstream business
Briefing.com
DTE Energy today announced that the company's Board has unanimously authorized management to pursue a plan to spin-off the DTE Midstream business from DTE Energy. Midstream is the company's non-utility natural gas pipeline, storage, and gathering business. The transaction would transform DTE Energy into a predominantly pure-play regulated electric and natural gas utility.With the completion of the separation, DTE Energy's utility operating earnings would be in-line with its pure-play peers. The company is targeting a long-term operating EPS growth rate of 5-7% off its 2020 original guidance. This includes 7-8% long-term operating earnings growth for its regulated electric business and approx. 9% for its regulated natural gas business.This growth is supported by $17 bln of planned utility capital investments over the next five years -- a $2 bln, or 13%, increase over DTE Energy's prior plan. Midstream would become an independent, publicly traded company well positioned for sustainable growth. Midstream's 2020 adjusted EBITDA is estimated to be approx. $700 mln. The separation transaction is not expected to have any adverse impact on DTE Energy's utility operations, customers, or customer rates.Under the separation plan, DTE Energy shareholders will retain their current shares of DTE Energy stock and receive a pro-rata dividend of shares of the new Midstream company stock in a transaction that is expected to be tax-free to DTE Energy and its shareholders for US federal income tax purposes. DTE Energy is targeting to complete the spin-off by mid-year 2021.