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ETP, EEP, DM: MLP Sector Mergers Continue in Third Quarter

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Announced mergers

There were quite a few MLP merger announcements in the third quarter. On August 1, Energy Transfer Partners (ETP) announced an agreement to merge with Energy Transfer Equity (ETE). The transaction is expected to close in Q4 2018. In September, Enbridge (ENB) announced agreements to acquire Enbridge Energy Partners (EEP), Enbridge Energy Management (EEQ), and Enbridge Income Fund Holdings (ENF). The merger was first proposed in May.

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Enbridge entered an agreement to acquire Spectra Energy Partners (SEP) in August. All the transactions are expected to close in the fourth quarter of 2018. Dominion Energy (D) offered to acquire Dominion Energy Midstream Partners (DM) in September. The companies expect to reach an agreement in the fourth quarter and complete the transaction in the first quarter of 2019. The above table lists the transactions announced as well as those completed in Q3.

Completed transactions

Among the acquisitions announced earlier but completed in Q3 was Williams Companies’ (WMB) acquisition of Williams Partners, which closed in August. The transaction was announced in June. In July, Loews (L) completed the acquisition of Boardwalk Pipeline Partners, and NuStar Energy (NS) completed the merger with NuStar GP Holdings. Cheniere Energy (LNG) completed the acquisition of Cheniere Energy Partners LP Holdings in September.

The announced and completed transactions in Q3 are a continuation of ongoing simplification and consolidation in the sector that broadly started with Kinder Morgan’s (KMI) consolidation in 2014.

Let’s next take a look at the current valuations of top MLPs.

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