Crestwood Equity Partners has signed a deal to buy its affilliate Crestwood Midstream Partners to make it single entity valued at $7.5bn.
According to the terms of the merger agreement, Crestwood Midstream will integrate and operate with a newly formed subsidiary for Crestwood Equity.
Crestwood Midstream equity holders will get 2.75 units of Crestwood Equity for each share they own.
Crestwood chairman, president and CEO Robert Phillips said: “By combining our partnerships and simplifying our corporate structure, we are better able to execute on our strategic objectives of fundamental value creation through providing first-class customer service and by executing on organic expansion and acquisition opportunities around our portfolio of midstream assets.
“The permanent elimination of our incentive distribution rights immediately improves our future cost of capital and better positions Crestwood to capture our share of the opportunities in front of us.”
The deal still awaits customary closing conditions, following which it is expected to be concluded by the third quarter.
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By GlobalDataUS based Crestwood Midstream owns and operates midstream businesses across multiple unconventional shale resource plays.
The firm is responsible for gathering, processing, treating, compression, storage, transportation and terminalling of natural gas, NGLs and crude oil.
The merger is expected to assist the firm in simplifying its corporate structure in order to strengthen its operating footprint.
