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Energy Transmission is buying Crestwood Equity Partners in a $7.1 billion all-stock deal

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  • Energy Transfer is buying Crestwood Equity Partners for $7.1 billion in an all-stock deal.
  • Crestwood investors will receive 2.07 Energy Transfer shares for every Crestwood share they own.
  • The deal will help Energy Transfer expand its presence in the Williston and Delaware basins, and allow it entry into the Powder River basin.

Oil and gas service provider Energy Transfer LP (ET(Agreed to purchase Crestwood Equity Partners LP)CEQP) for $7.1 billion, including $3.3 billion in debt.

The all-stock deal gives Crestwood investors 2.07 Energy Transfer shares for every Crestwood share they own. Upon completion of the agreement, Crestwood shareholders will own approximately 6.5% of the stake in Power Transmission.

Crestwood stores and transports natural gas and crude oil, and the companies said the deal would expand energy transportation in the Williston and Delaware basins, and give it access to the Powder River basin. The merger is expected to accrue immediately with distributable cash flow per unit, they added.

Energy Transfer has indicated that it expects to generate at least $40 million in annual run rate cost synergies before any additional benefits of financial and business opportunities.

The transaction is scheduled to close in the fourth quarter, subject to approval by Crestwood unit owners and other customary terms.

Energy transmission shares closed up 1.7% and Crestwood shares closed up 4.6% Wednesday after the news.

YCharts


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