Sunoco Logistics acquiring Energy Transfer
NEW YORK (AP) — Sunoco Logistics Partners L.P. is buying rival Energy Transfer Partners in a stock deal worth about £20 billion that the energy companies’ hope will boost their operations. But shares for both companies fell in afternoon trading. The deal comes as Energy Transfer Partners remains at the center of controversy over the Dakota Access oil pipeline that will transfer oil from North Dakota to Illinois.
Construction of the £3.8 billion pipeline has been the object of protests for months by the Standing Rock Sioux, whose reservation lies near the pipeline route, and the tribe’s allies, who fear a leak could contaminate their drinking water. Energy Transfer shareholders will receive 1.5 common units of Sunoco stock for each Energy transfer share they own. Based on Sunoco’s closing price Friday, the deal was worth about £21.31 billion.
The deal is expected to close in the first quarter. The companies said they expect the deal to produce more than £200 million in commercial benefits and savings annually by 2019. Kelcy Warren, current chairman of Energy Transfer, will be CEO of the new company.
Michael J. Hennigan is currently CEO of Sunoco Logistics and is expected to have a management role with other executives after the deals. Shares of Newtown Square, Pennsylvania-based Sunoco Logistics fell £2.05, or 7.9 percent, to £24.14 in afternoon trading.
Shares of Dallas-based Energy Transfer Partners fell 3.50 percent, or 8.9 percent, to £35.86.