Mergers & Acquisitions
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Regency Energy To Buy Southern Union Gathering For $1.5 Bln - Quick Facts

Energy Transfer Partners, L.P. (ETP: Quote) and Energy Transfer Equity, L.P. (ETE: Quote) announced that their affiliate, Southern Union Company has agreed to contribute Southern Union Gathering Company, LLC, to Regency Energy Partners LP (RGP: Quote) for $1.5 billion. The acquisition will significantly expand Regency's presence in North America, the Permian Basin. The acquisition is expected to close in the second quarter of 2013.

Regency Energy Partners expects this acquisition will be neutral to slightly accretive in 2013 and to enhance its outlook for long-term distribution growth.

Regency said that it will finance the acquisition by issuing $900 million of new Regency units to Southern Union Company, comprised of $750 million of new common units and $150 million of new Class F common units.

The transaction will include the purchase of a 5,600-mile gathering system and approximately 500 MMcf/d of processing and treating facilities in west Texas and New Mexico for natural gas and natural gas liquids, Regency specified.

In conjunction with the transaction, ETE has agreed to forgo the incentive distribution rights payments associated with new common units issued by Regency for the equivalent of eight consecutive quarters post-closing and to eliminate the $10 million annual management fee due from Regency for two years post-closing.

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by RTT Staff Writer

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