Energy Transfer Partners is purchasing Sunoco for $5.3 billion in stock and cash as it looks to shift toward crude oil in the face of depressed natural gas prices. Sunoco shareholders will receive $25 in cash and 0.5245 Energy Transfer units, or $50.13 for each share they own. The deal represents a 23% premium to Sunoco’s closing price on Friday and is expected to close later this year.
Energy Transfer said the deal will immediately add to its distributable cash flow and will change the mix of its pipeline business to about 70% natural gas and 30% liquids. The deal will also give Energy transfer the distribution rights in Sunoco Logistics Partners, Sunoco’s 32.4% interest in Sunoco Logistics Partners' limited partner units and Sunoco's branded retail business.
Commenting on the acquisition, Energy Transfer CEO Kelcy Warren said, “As we have said in the past year, our goal is to derive more of our distributable cash flow from the transportation of heavier hydrocarbons like crude oil, NGLs and refined products.”
Energy Transfer Partners (ETP : NYSE : US$49.63), Net Change: 1.71, % Change: 3.57%, Volume: 4,181,300
Sunoco (SUN : NYSE : US$49.29), Net Change: 8.38, % Change: 20.48%, Volume: 26,887,319