Pembina Pipeline Corp PPL

South Bow Spinoff Will Allow TC Energy to Focus Its Efforts on More Capital-Intensive Businesses

In June 2024, TC Energy shareholders approved the spinoff of the firm’s liquids pipelines business. The spinoff will be called South Bow Corporation. We reduce our fair value estimate to CAD 53 from CAD 67 and maintain our narrow moat rating for the remaining TC Energy firm. South Bow has a lower-risk growth profile as compared with the overall TC Energy business, so divesting this liquids pipelines segment will allow TC Energy to focus on segments that are generating strong returns on capital, such as renewable energy.