Phillips 66 has signed a definitive agreement to acquire all the publicly held share capital of DCP Midstream at a price of $41.75 per common share, which represents a total of around $3.8bn.
The move, which is part of the company’s restructuring of interests in DCP Midstream, will increase Phillips 66’s stake in DCP Midstream to 86.8%.
The transaction has been unanimously approved by the board of directors of DCP Midstream GP, the general partner of DCP Midstream, and DCP Midstream GP.
A special committee of independent directors also recommended the approval, after evaluation, in consultation with independent financial and legal advisors.
In addition, Phillips 66 affiliates, as majority owners of the outstanding DCP Midstream common shares, have approved the transaction.
The transaction is expected to be completed in the second quarter of 2023, subject to certain customary closing conditions.
US-based Phillips 66 intends to fund the transaction through a combination of cash and debt while maintaining its current investment-grade credit ratings.
The company expects the transaction to generate an incremental $1bn of adjusted EBITDA.
In addition, Phillips 66 aims to generate at least $300m in operational and commercial synergies by integrating DCP Midstream into its existing midstream business.
Barclays served as an exclusive financial advisor, Bracewell as legal counsel, and Morris, Nichols, Arsht & Tunnell as special Delaware counsel to Phillips 66 on the transaction.
Evercore served as a financial advisor to the special committee of the board of directors of DCP Midstream, Hunton Andrews Kurth and Richards, Layton & Finger served as legal counsel to the special committee.
Phillips 66 president and CEO Mark Lashier said: “We are delivering on our commitment to grow our NGL business. Our wellhead-to-market platform captures the full NGL value chain.
“As we continue integrating DCP Midstream, we are unlocking significant synergies and growth opportunities.”
