According to a statement released on Monday, the Dallas-based Pipeline operator Energy Transfer Partners LP (ETP) has agreed to pay $5.3 billion in cash to acquire the largest U.S. independent oil refiner Sunoco, Inc. (SUN). The transaction will increase the Energy Transfer’s oil terminal equipments and pipeline assets, so that offset the adverse effects of continued sluggish in natural gas prices.
Sunoco will sell its each share at the price of $25 plus 0.5245 share of ETP stock. Calculated by the closing price last Friday of ETP stock, the valuation on SUN stock is $50.13 per share, representing a premium of 22.5% compared to the $40.91 closing price of SUN stock
According to the Bloomberg data, this premium level is below the average premium level of 48% of the 97 transactions in the U.S. oil pipeline industry over the past 12 months.
Through this transaction, Energy Transfer will obtain a 32.4% stake in Sunoco Logistics Partners LP (SXL) and get 7900 miles (about 12,711 km) oil pipelines, meanwhile the acquisition will also enable the company to get the 4900 Sunoco retail service stations in the United States.
Promoted by the news, ETP stock price rose 3.57%, or $1.71, to close at $49.63 per share Monday. Sun stock price shot up 20.48%, or $8.38, to end at $49.29 per share.