The deal will have Sunoco Logistics Partners L.P. offering 1.5 shares of SXL stock for each share of ETP stock. This values Energy Transfer Partners LP’s stock at 10% above its average price for the last 30 days of trading prior to the acquisition announcement.
Sunoco Logistics Partners L.P. says that it expects the deal to be immediately accretive to its distributable cash flow per common unit. It also expects the deal to boost near-term distribution in the low double digits.
Sunoco Logistics Partners L.P. is expecting that the deal with Energy Transfer Partners LP will strengthen its balance sheet. The logistics business also says it will allow for commercial synergies and costs savings in excess of $200 million per year by 2019.
The deal will have a crude oil midstream MLP combining with a natural gas midstream Master Limited Partnership (MLP). Sunoco Logistics Partners L.P. states that this will result in the creation of the second largest MLP, when measured by enterprise value.
Members of Sunoco Logistics Partners L.P.’s current management team will continue to lead the company after the acquisition is complete. SXL will also continue to operate out of its headquarters in Philadelphia.
The deal between Sunoco Logistics Partners L.P. and Energy Transfer Partners LP is currently set to close during the first quarter of 2017. However, it will first have to get approval from regulators and ETP shareholders.
SXL stock was down 7% and ETP stock was down 8% as of Monday afternoon.