The transaction, which combines the premier crude oil midstream master limited partnership (MLP) with the premier natural gas midstream MLP, is expected to strengthen the balance sheet of the combined organization.
Sunoco Logistics and ETP expect the transaction to generate commercial synergies and costs savings in excess of $200m annually by 2019.
Upon completion of the deal, the combined company is expected to be the second largest MLP in terms of enterprise value.
Sunoco Logistics said in a statement: “With this transaction, Sunoco Logistics and ETP expect to build upon their experience working together as partners in several joint ventures to pursue commercial opportunities and to achieve cost savings while enhancing the service capabilities for their customers.”
Scheduled to be completed in the first quarter of 2017, the deal is subject to receipt of ETP unitholder approval and other customary closing conditions.
Under the terms of the deal, each of the Energy Transfer unitholders will receive 1.5 common units of Sunoco Logistics for each share held, valuing their Energy Transfer common unit at $39.29.
Both the companies expect that the transaction will result in commercial synergies and costs savings in excess of $200m annually by 2019.
The company said: "The transaction is expected to provide significant benefits for Sunoco Logistics and ETP unitholders as the combined partnership will have increased scale and diversification across multiple producing basins and will have greater opportunities to more closely integrate Sunoco Logistics’s natural gas liquids business with ETP’s natural gas gathering, processing and transportation business."
Image: Pipeline firm Sunoco Logistics will acquire ETP to become the second largest MLP in terms of enterprise value. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.
