Sunoco Logistics has entered into a merger agreement to acquire Energy Transfer Partners to create the second largest master limited partnership as measured by enterprise value.
The deal is expected to provide significant benefits for both companies’ unitholders as the combined partnership will have increased scale and diversification across multiple producing basins. It will also have greater opportunities to more closely integrate Sunoco’s natural gas liquids business with Energy Transfer’s natural gas gathering, processing and transportation business.
It is expected that the transaction will allow for commercial synergies and cost savings in excess of $200 million annually by 2019.
Both companies have spent approximately $15 billion in organic growth capital over the past few years, and these expenditures, combined with the completion of other major capital projects currently in progress, are expected to continue to generate strong distributable cash flow growth.