US energy pipeline operator Energy Transfer has strengthened its position in the midstream sector with the acquisition of rival Crestwood Equity Partners in a deal valued at around $7.1bn including debt.
As part of the deal, which was announced in August 2023, Crestwood’s common unit holders received 2.07 Energy Transfer common units for each common unit held in the former.
Crestwood’s system comprises gathering and processing assets in the Williston, Delaware and Powder River basins.
These include around two billion cubic feet per day (bcfd) of gas-gathering capacity, 1.4bcfd of gas processing capacity and 340,000 barrels per day of crude-gathering capacity.
With the closing of the acquisition, the company now owns and operates more than 125,000 miles of pipelines and related assets in all the major producing regions in the US, and markets across 41 US states.
Effective on 3 November 2023, common units and preferred units of Crestwood ceased trading on the New York Stock Exchange (NYSE).
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Energy Transfer said in a press statement: “The new Energy Transfer preferred units will be Series I Fixed Rate Perpetual Preferred Units and will trade on the NYSE under the ticker symbol “ETprI”.”
Energy Transfer expects the combined operations of the two companies to generate at least $40m in initial annual run-rate cost and efficiency synergies, before additional anticipated benefits of financial synergies.
In a press statement, the company said: “The transaction is immediately accretive to distributable cash flow per unit for Energy Transfer, and adds significant cash flows from firm, long-term contracts and significant acreage dedications.”