Detroit-based utility, DTE Energy had announced the spin-off of its midstream division last year. On Friday, the spin-off details were confirmed in a press release. DT Midstream will start trading on the NYSE from July 1, 2021 under the ticker DTM. Current shareholders of DTE Energy(DTE) as of record date of June 18, 2021 will receive one share of DTM for every two shares of DTE.

Below is an excerpt from the press release:

DETROIT, June 04, 2021 — DTE Energy (NYSE:DTE) today announced that its Board of Directors has declared a pro rata dividend of the outstanding shares of DT Midstream common stock, to be distributed at 12:01 a.m. ET on July 1, 2021, to DTE’s shareholders of record as of 5:00 p.m. ET on June 18, 2021, the record date for the distribution. The distribution is subject to the satisfaction or waiver of certain conditions.

As previously announced, DTE shareholders will retain their current shares of DTE Energy common stock and, on the distribution date, each DTE shareholder will also receive, for every two shares of DTE common stock owned as of the record date, a distribution of one share of DT Midstream common stock. Fractional shares of DT Midstream common stock will not be distributed to DTE shareholders. Instead, the fractional shares of DT Midstream common stock will be aggregated and sold in the open market, with the net proceeds distributed pro rata in cash payments to DTE shareholders who would otherwise receive a fractional share of DT Midstream common stock.

No action or payment is required by DTE shareholders to receive the shares of DT Midstream common stock or cash in lieu of fractional shares. An Information Statement containing details regarding the distribution of the shares of DT Midstream common stock, DT Midstream’s business and management following the spin-off and other information regarding the spin-off will be made available to DTE shareholders prior to the distribution date.

For U.S. federal income tax purposes, DTE’s U.S. shareholders (other than those subject to special rules) generally should not recognize gain or loss as a result of the distribution of DT Midstream shares, except with respect to cash received in lieu of fractional shares. DTE shareholders are urged to consult with their tax advisors with respect to the U.S. federal, state and local or foreign tax consequences, as applicable, of the spin-off.

“Today’s announcement marks another important milestone toward completing the planned spin-off of DTE’s non-utility Midstream business,” said Jerry Norcia, DTE Energy president and CEO.

“Following the separation, DTE will be a best-in-class predominantly pure-play utility that is well positioned to continue delivering clean, safe, reliable and affordable energy and significant value creation,” Norcia continued. “DT Midstream will also be poised for success and value creation with numerous growth opportunities as a premier, independent midstream company with assets in premium basins connected to major demand markets.”

Beginning on or about June 17, 2021 and continuing until, but not including, the distribution date, it is expected that DT Midstream common stock will trade on a “when-issued” basis on the NYSE under the ticker symbol “DTM WI.” On Wednesday, June 30, 2021, when-issued trading of DT Midstream common stock will end and on Thursday, July 1, 2021, DT Midstream common stock will begin trading “regular way” on the NYSE under the ticker symbol “DTM.” DTE will continue to trade on the NYSE under the ticker symbol “DTE”.

Also beginning on or about June 17, 2021 and continuing until, but not including, the distribution date, it is expected that there will be two markets in DTE Energy common stock. DTE Energy shares that trade in the “regular way” market under the symbol “DTE” will trade with an entitlement to shares of DT Midstream common stock to be distributed pursuant to the distribution. DTE Energy shares that trade in the “ex-distribution” market under the symbol “DTE WI” will trade without an entitlement to shares of DT Midstream common stock. DTE shareholders who sell their shares in the “regular way” market before the distribution date, will also be selling their entitlement to receive DT Midstream common shares in the distribution. Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling DTE Energy common stock on or before the distribution date.

Source: DTE Energy

Key points:

• 1 DTM share for every 2 DTE shares
• Fractional shares due will be paid in cash
• Taxes will be due on cash payment for fractional shares
• No tax implications for US investors for receiving DTM shares
• Like DTE, DTM also will trade on the NYSE

Disclosure: Long DTE