Energy Transfer to Buy Crestwood in a $7.1 Billion Deal
August 17, 2023: Energy Transfer LP (ET), a midstream energy company, has agreed to acquire Crestwood Equity Partners LP (CEQP), a natural gas storage and transportation company, in an all-equity transaction valued at approximately $7.1 billion.
Under the terms of the Deal, ET will acquire all of CEQP’s outstanding standard units. Crestwood unitholders will receive 2.07 ET common units for each CEQP standard unit they own.
The transaction is expected to close in the fourth quarter of 2023, subject to the approval of CEQP’s unitholders, regulatory approvals, and other customary closing conditions.
The acquisition will expand ET’s presence in the natural gas midstream market. CEQP owns and operates a portfolio of natural gas storage and transportation assets in the United States, including the Permian Basin, the Marcellus Shale, and the Gulf Coast.
ET said the acquisition will be immediately accretive to its distributable cash flow per unit. The company expects to achieve $100 million in synergies from the Deal within two years.
Takeaways for investors:
- This is a positive development for ET investors, as it will expand the company’s reach and improve its financial performance.
- The Deal is also a sign of the consolidation in the natural gas midstream market.
- Investors should watch for updates on the regulatory approval process and the expected closing date.
Actionable steps that investors can take:
- Consider adding ET to their portfolio if they want natural gas midstream market exposure.
- Monitor the regulatory approval process and the expected closing date.
- Be prepared for the stock price to fluctuate during the approval process.
