Key Takeaways
- Energy Transfer is buying Crestwood Equity Partners for $7.1 billion in an all-equity deal.
- Crestwood investors will get 2.07 Energy Transfer shares for each Crestwood share they own.
- The deal will help Energy Transfer expand its presence in the Williston and Delaware basins, and give it entry into the Powder River Basin.
Oil and gas services provider Energy Transfer LP (ET) agreed to buy Crestwood Equity Partners LP (CEQP) for $7.1 billion dollars, including $3.3 billion in debt.
The all-equity deal gives Crestwood investors 2.07 Energy Transfer shares for every Crestwood share they own. When the agreement is finalized, Crestwood shareholders will hold about a 6.5% stake of Energy Transfer.
Crestwood stores and transports natural gas and crude oil and the companies said the deal will extend Energy Transfer’s reach in the Williston and Delaware basins, and give it entry into the Powder River Basin. They added that the merger is expected to be immediately accretive to the distributable cash flow per unit.
Energy Transfer noted it anticipates that it will achieve at least $40 million of annual run-rate cost synergies before any additional benefits of financial and commercial opportunities.
The transaction is set to close in the fourth quarter, subject to approval by Crestwood unitholders and other customary conditions.
Shares of Energy Transfer closed 1.7% higher and Crestwood shares finished up 4.6% on Wednesday following the news.
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