21.11.2016, 22:10
Sunoco Logistics to buy Energy Transfer Partners
OREANDA-NEWS. Sunoco Logistics Partners will purchase Energy Transfer Partners (ETP) in an all-stock transaction valued as close to $20bn, the latest in a string of large midstream mergers.
The deal combines two segments of the Energy Transfer group of companies.
ETP is the main company building the controversial Dakota Access crude pipeline (DAPL), which has been stalled in North Dakota amid large protests by Native American groups and environmentalists.
Under the deal, ETP unitholders will receive 1.5 common units of Sunoco Logistics for each common unit of ETP they own. That represents a 10pc premium to the volume weighted average price of ETP's common units for the last 30 trading days.
The combination of the two companies will allow more integration of Sunoco's NGL business with ETP's natural gas gathering, processing and transportation business.
The merger will result in annual cost savings of about $200mn by 2019, the companies said.
The transaction is also expected to strengthen the balance sheet of the combined company by using cash distribution savings to reduce debt and to pay for a portion of capital spending programs.
The combined partnership will be the second largest MLP as measured by enterprise value, according to the companies.
ETP chief executive Kelcy Warren will serve in the same role for the joint partnership.
Sunoco chief executive Mike Hennigan and other members of the Sunoco management team will continue in leading management roles of the combined company.
ETP owns and operates more than 62,500 miles (100,600km) of natural gas and NGL pipelines.
Sunoco Logistics owns a diverse portfolio of pipelines, terminals, and acquisition and marketing assets for crude, refined products, and NGLs.
The merger, approved by the boards of directors of both companies, is expected to close in the first quarter of 2017.
The deal is the latest in a string of large proposed mergers in the midstream sector.
Canadian pipeline company Enbridge is in the process of buying Spectra Energy for $28bn, a deal that would create one of the largest midstream companies in North America, with a massive natural gas system in the eastern half of the US and a dominant position in moving Canadian crude.
TransCanada has agreed to acquire Columbia Pipeline Group for $13bn in cash and debt, creating a large natural gas infrastructure company. That deal would give TransCanada a combined 57,000 miles (91,700km) of pipelines that stretch from Canada to the US Gulf coast and the northeast and midcontinent US.
The deal combines two segments of the Energy Transfer group of companies.
ETP is the main company building the controversial Dakota Access crude pipeline (DAPL), which has been stalled in North Dakota amid large protests by Native American groups and environmentalists.
Under the deal, ETP unitholders will receive 1.5 common units of Sunoco Logistics for each common unit of ETP they own. That represents a 10pc premium to the volume weighted average price of ETP's common units for the last 30 trading days.
The combination of the two companies will allow more integration of Sunoco's NGL business with ETP's natural gas gathering, processing and transportation business.
The merger will result in annual cost savings of about $200mn by 2019, the companies said.
The transaction is also expected to strengthen the balance sheet of the combined company by using cash distribution savings to reduce debt and to pay for a portion of capital spending programs.
The combined partnership will be the second largest MLP as measured by enterprise value, according to the companies.
ETP chief executive Kelcy Warren will serve in the same role for the joint partnership.
Sunoco chief executive Mike Hennigan and other members of the Sunoco management team will continue in leading management roles of the combined company.
ETP owns and operates more than 62,500 miles (100,600km) of natural gas and NGL pipelines.
Sunoco Logistics owns a diverse portfolio of pipelines, terminals, and acquisition and marketing assets for crude, refined products, and NGLs.
The merger, approved by the boards of directors of both companies, is expected to close in the first quarter of 2017.
The deal is the latest in a string of large proposed mergers in the midstream sector.
Canadian pipeline company Enbridge is in the process of buying Spectra Energy for $28bn, a deal that would create one of the largest midstream companies in North America, with a massive natural gas system in the eastern half of the US and a dominant position in moving Canadian crude.
TransCanada has agreed to acquire Columbia Pipeline Group for $13bn in cash and debt, creating a large natural gas infrastructure company. That deal would give TransCanada a combined 57,000 miles (91,700km) of pipelines that stretch from Canada to the US Gulf coast and the northeast and midcontinent US.
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