Sunoco Logistics Partners to acquire Energy Transfer PartnersStaff Writer | November 22, 2016
Sunoco Logistics Partners (SXL) and Energy Transfer Partners (ETP) today announced that they have entered into a merger agreement providing for the acquisition of ETP by SXL in a unit-for-unit transaction.
Acquisition Unit-for-unit deal
Under the terms of the transaction, ETP unitholders will receive 1.5 common units of SXL for each common unit of ETP they own.
This equates to a 10% premium to the volume weighted average pricing of ETP’s common units for the last 30 trading days immediately prior to the announcement of the transaction.
As SXL will be the acquiring entity, the existing incentive distribution rights provisions in the SXL partnership agreement will continue to be in effect, and Energy Transfer Equity will own the incentive distribution rights of SXL following the closing of the transaction.
As part of this transaction, ETE has agreed to continue to provide all the incentive distribution right subsidies that are currently in effect with respect to both partnerships.
The transaction is expected to be immediately accretive to SXL’s distributable cash flow per common unit and is also expected to allow the combined partnership to be in position to achieve near-term distribution increases in the low double digits and a more than 1.0x distribution coverage ratio. ■