Energy Transfer LP to acquire Crestwood Equity in $7.1B all-equity transaction

Energy Transfer LP (ET) and Crestwood Equity (CEQP) announced that the parties have entered into a definitive merger agreement pursuant to which Energy Transfer will acquire Crestwood in an all-equity transaction valued at approximately $7.1B, including the assumption of $3.3Bof debt, based on the closing price on August 15. Under the terms of the agreement, Crestwood common unitholders will receive 2.07 Energy Transfer common units for each Crestwood common unit. The transaction is expected to close in the fourth quarter, subject to the approval of Crestwood’s unitholders, regulatory approvals, and other customary closing conditions. Upon closing, Crestwood common unitholders are expected to own approximately 6.5% of Energy Transfer’s outstanding common units. Crestwood’s system includes gathering and processing assets located in the Williston, Delaware and Powder River basins, including approximately 2B cubic feet per day of gas gathering capacity, 1.4B cubic feet per day of gas processing capacity and 340 thousand barrels per day of crude gathering capacity. The transaction is expected to be immediately accretive to distributable cash flow per unit as well as neutral to Energy Transfer’s leverage metrics upon closing. Energy Transfer also expects to achieve at least $40M of annual run-rate cost synergies before additional benefits of financial and commercial opportunities.