Owner and operator of midstream businesses in different shale resource plays across the United States, Crestwood Equity Partners (NYSE: CEQP) gained in morning trading on Wednesday after announcing an all-stock deal worth $7.1 billion, (including the assumption of $3.3 billion of debt) with Energy Transfer LP (NYSE: ET). Energy Transfer is the owner and operator of a diversified portfolio of energy assets in the United States.
According to the terms of the transaction, Crestwood common stockholders will receive 2.07 Energy Transfer shares for each Crestwood common unit. The acquisition is expected to close in the fourth quarter of this year.
The Crestwood acquisition is expected to strengthen Energy Transfer’s foothold in the Williston and Delaware basins while also opening doors to the Powder River basins. The merger is expected to deliver a positive financial impact as well, immediately increasing distributable cash flow per unit and maintaining Energy Transfer’s leverage metrics. Additionally, the acquisition is expected to offer tax efficiency to Crestwood unitholders and position both companies for long-term value growth.
CEQP stock has gained more than 12% year-to-date.
