Dallas pipeline magnate Kelcy Warren is merging the two pipeline arms of his Energy Transfer empire — Energy Transfer Partners and Sunoco Logistics Partners — in a $20 billion deal to simplify the number of publicly traded businesses.
Philadelphia-based Sunoco Logistics Partners would actually acquire Dallas’ Energy Transfer Partners with the publicly traded Energy Transfer Equity remaining the overall parent business. Warren would become the chief executive officer of the merged pipeline business, Energy Transfer announced Monday morning.
Energy Transfer Partners investors, called unitholders, would receive receive 1.5 units of Sunoco Logistics Partners for each common unit of ETP they own. Energy Transfer called this a 10 percent premium to the average pricing of Energy Transfer’s common units for the last 30 trading days prior to the announcement of the deal.
Energy Transfer is the primary owner of the controversial Dakota Access Pipeline, which is 85 percent complete, but mired in delays by the Obama administration and ongoing protests by environmentalists and Native American tribes. The proposed merger, which would close by the end of March, is not expected to impact the project.
Energy Transfer and Sunoco said the deal will give them increased scale and cost savings. Energy Transfer previously acquired Sunoco in 2012 for more than $5 billion, but maintained them as separate public businesses.
Energy Transfer’s fourth publicly traded business, Sunoco LP, would remain the gas station and convenience store wing of the Energy Transfer umbrella.
Energy Transfer president and chief operating offer Mackie McCrea would become chief commercial officer of the merged Sunoco Logistics entity under Warren. Sunoco LP Chairman Matt Ramsey would take over as president. Lastly, Sunoco LP Chief Financial Officer Tom Long would serve as the CFO of the merged business.
Current Sunoco Logistics President and CEO Mike Hennigan and other members of the existing leadership team “will continue in leading management roles of the combined company.”