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Energy Transfer Partners Plans to Acquire Sunoco for $5.3 Billion to Enter into Lucrative Oil Transportation Business
GlobalData, May 2012, Pages: 9
Energy Transfer Partners Plans to Acquire Sunoco for $5.3 Billion to Enter into Lucrative Oil Transportation Business - Deal Analysis from GlobalData
Summary
Energy Transfer Partners L.P (ETP) agreed to acquire Sunoco Inc (Sunoco) for a purchase consideration of approximately $5.3 billion. As a part of the consideration, Sunoco shareholders can elect to receive, for each common share, either $50 in cash, 1.0490 ETP common units or a combination of $25 in cash and 0.5245 ETP common units.
In connection with the transaction, ETP will also own Sunoco’s general partner interest and the Incentive Distribution Rights (IDRs) in Sunoco Logistics Partners, and Sunoco’s 32.4% interest in Sunoco Logistics Partners’ limited partner units and Sunoco’s branded retail business, which generates stable cash flows from a portfolio of approximately 4,900 retail outlets in the US.
Upon completion of the transaction, Sunoco shareholders are expected to own approximately 20% of ETP common units. The acquisition will enable ETP to expand its geographical footprint and strengthen its presence in the transportation, terminalling and logistics of crude oil, NGLs and refined products.
Wells Fargo Securities, LLC is acting as financial advisor, while Latham & Watkins LLP, Bingham McCutchen LLP and Morris, Nichols, Arsht & Tunnell LLP are acting as legal advisors to Energy Transfer Partners in the transaction. Credit Suisse Securities (USA) LLC is acting as financial advisor, while Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Sunoco in the transaction.
The transaction is expected to be closed in the third or fourth quarter of 2012, subject to approval by both the companies' board of directors, shareholders and other customary regulatory approvals.
Scope
- Rationale behind ETP to acquire Sunoco
- Stratigic benefits for the companies involved in the transaction
- Geography covered - US
Reasons to buy
- Develop a sound understanding of the major M&A's, Partnerships, and Joint Ventures undertaken by ConocoPhillips. Rationale behind ConocoPhillips selling Nigerian assets.
- ConocoPhillips's plan to globally restructure its business.
- Identify the reason behind ConocoPhillips selling its Nigerian assets.
Keywords
ETP, Sunoco, pipelines, US East Coast, Northeastern States,Tax, Master Limited Partnership (MLP)
1
1
1.1 List of Tables
1.2 List of Figures
2 Energy Transfer Partners to Acquire Sunoco for $5.3 Billion
2.1 Deal Overview
2.2 Deal in Brief
2.3 ETP Plans to Enter Lucrative Oil Transportation Business by Acquiring Sunoco
2.4 Sunoco Shareholders to Gain from the Premium Paid on Acquisition and Prospects of Higher Dividend Payout by ETP
2.5 Deal Financials and Valuations
3 Appendix
3.1 Methodology
3.2 Contact Us
3.3 Disclaimer
1.1 List of Tables
Table 1: ETP, Major Gas Pipelines Operated by ETP in the US, 2012
Table 2: Sunoco, Major Oil and Refined Product Pipelines Operated by Sunoco in the US, 2012
Table 3: Major Deals by MLPs in the Pipelines Industry, the US, December 2011 to Present
Table 4: US, Major Acquisition Deals of ETP, May 2011 to Present
Table 5: Companies Involved
Table 6: Financials of the Deal
Table 7: Advisor Information
Table 8: Target Information
Table 9: Target’s Financial Information
Table 10: Share Price Information
Table 11: Company Valuation Multiples
Table 12: Acquirer Information
1.2 List of Figures
Figure 1: ETP, Pipelines Infrastructure after the Acquisition of Sunoco, Miles, 2012
Figure 2: US, Location Map of Pipelines and Terminals of ETP and Sunoco, 2012
Figure 3: Stock Price Movement of Sunoco, $/share, April 03, 2012 – May 03, 2012
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