US energy company Phillips 66 is to buy all remaining shares that it does not already own in midstream partnership Phillips 66 Partners.
Phillips 66 set up Phillips 66 Partners to operate, develop and acquire primarily fee-based crude oil, refined petroleum products and natural gas liquids pipelines, terminals and other midstream assets. Following the transaction, expected to be completed in Q1 2022, Phillips 66 Partners will become a wholly owned subsidiary of Phillips 66 and will no longer be a publicly traded partnership. Phillips 66 says that the transaction will simplify the governance and corporate structure.
The all-stock deal is worth US$3.4 billion, based on the closing price of the companies on 26 October 2021. For each share they hold, Phillips 66 Partners shareholders will receive 0.5 of a share of Phillips 66 common stock.
‘We believe this acquisition will allow both [Phillips 66] PSX shareholders and [Phillips 66 Partners] PSXP unitholders to participate in the value creation of the combined entities, supported by the strong financial position of Phillips 66,’ says Greg Garland, chairman and CEO of Phillips 66.