Energy Transfer Equity Buying Southern union for $7.9 Billion
Thursday, June 16, 2021 7:18 AM



Energy Transfer Equity L.P. (NYSE: ETE) said today, that it has agreed to acquire nation’s leading diversified natural gas company Southern Union Company (NYSE: SUG). Both the companies have entered into a definitive agreement under which Energy Transfer will acquire Southern Union for $7.9 billion, including $3.7 billion of existing SUG debt, creating the premier group of integrated midstream companies in the United States natural gas industry.

Under terms of the agreement, which has been unanimously approved by the boards of directors of both companies, stockholders of SUG will exchange their common shares for newly issued Series B Units of ETE with a value of $33.00 per share, or approximately $4.2 billion. 

The acquisition is expected to provide Energy Transfer with direct ownership of attractive assets that are complementary to the assets owned and operated by ETE’s two master limited partnership (MLP) subsidiaries, Energy Transfer Partners, L.P. (NYSE: ETP) and Regency Energy Partners LP (Nasdaq: RGNC). SUG will add more than 44,000 miles of natural gas pipelines and approximately 30.7 billion cubic feet per day of natural gas transportation capacity, making ETE among the largest natural gas infrastructure players in the U.S.

“The acquisition of Southern Union will give ETE a larger, more competitive interstate and midstream platform and will add significant demand-driven pipeline assets to the Energy Transfer portfolio,” said Kelcy Warren, ETE’s chairman of the board of directors. “Furthermore, the acquisition of Southern Union will significantly enhance and diversify ETE’s cash flow profile, making this transaction accretive to ETE’s unit holders while preserving our commitment to maintaining investment grade credit metrics at ETP and SUG and achieving investment grade status at Regency.”

The transaction is expected to close in the first quarter of 2012, subject to SUG stockholder approval and regulatory approvals.

Shares of Energy Transfer Equity last traded at $42.47, down 0.56 percent, while SUG last traded at $28.26, down 1.70 percent on Wednesday.


 

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