Sunoco Logistics Partners LP has agreed to acquire Energy Transfer Partners LP (ETP) in a unit-for-unit deal valued at $20 billion.
Sunoco Logistics says the combined partnership will have increased scale and diversification across multiple producing basins and will have greater opportunities to more closely integrate Sunoco’s natural gas liquids business with ETP’s natural gas gathering, processing, and transportation business.
The companies, which are already participating in several partnerships, expect the deal will allow for commercial synergies and costs savings in excess of $200 million/year by 2019.
The deal, approved by the boards and conflicts committees of both partnerships, is expected to close in first-quarter 2017.
ETP unitholders will receive 1.5 common units of Sunoco Logistics for each common unit of ETP they own. This equates to a 10% premium to the volume weighted average pricing of ETP’s common units for the last 30 trading days immediately prior to the announcement of the deal.
At the closing of the transaction, the chief executive officer, chief commercial officer, president, and chief financial officer of the combined partnership will be Kelcy Warren, Mackie McCrea, Matt Ramsey, and Tom Long, respectively.
Mike Hennigan and other members of the Sunoco Logistics management team are expected to continue in leading management roles of the combined company with the Sunoco Logistics business headquartered in Philadelphia.
ETP last week sued in federal district court for permission to complete the Dakota Access crude oil pipeline after the US Army Corps of Engineers said the previous day that it would continue to delay issuing easement permits under Lake Oahe in North Dakota for further consultations with the Standing Rock Sioux Indian tribe (OGJ Online, Nov. 16, 2016).