Energy Transfer Equity, L.P. (NYSE: ETE) and Energy Transfer
Partners, L.P. (NYSE: ETP) today announced that they have
entered into a definitive agreement providing for the merger of ETP with
a wholly-owned subsidiary of ETE in a unit-for-unit exchange. In
connection with the transaction, ETE’s incentive distribution rights
(IDRs) in ETP will be cancelled. The transaction, which was approved by
the boards of directors and conflicts committees of both partnerships,
is expected to close in the fourth quarter of 2018, subject to the
approval by a majority of the unaffiliated unitholders of ETP and other
customary closing conditions. ETE currently owns the general partner of
ETP.
Under the terms of the transaction, ETP unitholders (other than ETE and
its subsidiaries) will receive 1.28 common units of ETE for each common
unit of ETP they own.
The transaction is expected to provide significant benefits for the
partnerships, including:
The transaction is expected to strengthen the balance sheet of the
combined organization by utilizing cash distribution savings to reduce
debt and to fund a portion of ETP’s robust growth capital expenditure
program. The completion of major capital projects currently in progress
is expected to continue to generate strong distributable cash flow
growth for the combined partnership following the transaction. The
partnerships expect to maintain investment grade credit ratings for the
combined partnership.
In connection with the simplification transaction, ETE’s general partner
has agreed to waive its existing contractual preemptive right with
respect to the issuance of ETE common units in the merger that, if
otherwise exercised, would entitle ETE’s general partner to purchase
additional ETE common units to maintain its and its affiliates’
percentage ownership interest in ETE. In partial consideration for that
waiver, ETE’s general partner will be issued a newly created series of
Class A units that will result in ETE’s general partner and its
affiliates maintaining the same relative voting interest in ETE that the
general partner and its affiliates had prior to the merger.
ETE and ETP will hold a joint conference call to discuss the transaction
details on Thursday, August 2, 2018 at 9:00 a.m. Central Time (10:00
a.m. Eastern Time). An investor presentation will be posted to the
partnerships’ websites and filed with the SEC on a Form 8-K.
The dial-in number for the call is 877-709-8150 or 201-689-8354. To
participate by telephone, please call approximately 15 minutes before
the 9:00 a.m. Central Time (10:00 a.m. Eastern Time) start time and ask
for the Energy Transfer call. The investor presentation and a live
webcast of the call may be accessed on the investor relations page of
ETE’s and ETP’s website at www.energytransfer.com.
The call will be available for replay for a limited time by dialing
877-660-6853 or 201-612-7415, Conference ID 13682328. A replay of the
broadcast will also be available on ETE’s and ETP’s website for a
limited time.
A more detailed description of the merger agreement and the terms of the
Class A units will be set forth in a Current Report on Form 8-K that ETE
expects to file with the Securities and Exchange Commission on August 2,
2018.
Advisors
Latham & Watkins LLP acted as legal counsel to ETE. Vinson & Elkins
LLP acted as legal counsel to ETP. Citi acted as financial advisor
and Potter Anderson & Corroon LLP acted as legal counsel to ETE’s
conflicts committee. Barclays acted as financial advisor and Richards
Layton & Finger, P.A. acted as legal counsel to ETP’s conflicts
committee.
About Energy Transfer
Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited partnership
that owns the general partner and 100% of the incentive distribution
rights (IDRs) of Energy Transfer Partners, L.P. (NYSE: ETP) and Sunoco
LP (NYSE: SUN). ETE also owns Lake Charles LNG Company and the general
partner of USA Compression Partners, LP (NYSE: USAC). On a consolidated
basis, ETE’s family of companies owns and operates a diverse portfolio
of natural gas, natural gas liquids, crude oil and refined products
assets, as well as retail and wholesale motor fuel operations and LNG
terminalling.
Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited
partnership that owns and operates one of the largest and most
diversified portfolios of energy assets in the United States.
Strategically positioned in all of the major U.S. production basins,
ETP’s operations include complementary natural gas midstream, intrastate
and interstate transportation and storage assets; crude oil, natural gas
liquids (NGL) and refined product transportation and terminalling
assets; NGL fractionation; and various acquisition and marketing assets.
ETP’s general partner is owned by Energy Transfer Equity, L.P. (NYSE:
ETE).
Forward-Looking Statements
This release includes “forward-looking” statements. Forward-looking
statements are identified as any statement that does not relate strictly
to historical or current facts. Statements using words such as
“anticipate,” “believe,” “intend,” “project,” “plan,” “expect,”
“continue,” “estimate,” “goal,” “forecast,” “may” or similar expressions
help identify forward-looking statements. ETE and ETP cannot give any
assurance that expectations and projections about future events will
prove to be correct. Forward-looking statements are subject to a variety
of risks, uncertainties and assumptions. These risks and uncertainties
include the risks that the proposed transaction may not be consummated
or the benefits contemplated therefrom may not be realized. Additional
risks include: the ability to obtain requisite regulatory and unitholder
approval and the satisfaction of the other conditions to the
consummation of the proposed transaction, the potential impact of the
announcement or consummation of the proposed transaction on
relationships, including with employees, suppliers, customers,
competitors and credit rating agencies, and the ability to achieve
revenue, DCF and EBITDA growth, and volatility in the price of oil,
natural gas, and natural gas liquids. Actual results and outcomes may
differ materially from those expressed in such forward-looking
statements. These and other risks and uncertainties are discussed in
more detail in filings made by ETE and ETP with the Securities and
Exchange Commission (the “SEC”), which are available to the public. ETE
and ETP undertake no obligation to update publicly or to revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
The information contained in this press release is available on ETE’s
and ETP’s website at www.energytransfer.com.
Additional Information and Where to Find It
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND
THE REGISTRATION STATEMENT REGARDING THE TRANSACTION CAREFULLY WHEN IT
BECOMES AVAILABLE. These documents (when they become available), and any
other documents filed by ETE or ETP with the SEC, may be obtained free
of charge at the SEC’s website, at www.sec.gov.
In addition, investors and security holders will be able to obtain free
copies of the registration statement and the proxy statement/prospectus
by phone, e-mail or written request by contacting the investor relations
department of ETE or ETP at the numbers and addresses set forth below.
Participants in the Solicitation
ETE, ETP and their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies in connection
with the proposed merger. Information regarding the directors and
executive officers of ETE is contained in ETE’s Form 10-K for the year
ended December 31, 2017, which was filed with the SEC on February 23,
2018. Information regarding the directors and executive officers of ETP
is contained in ETP’s Form 10-K for the year ended December 31, 2017,
which was filed with the SEC on February 23, 2018. Additional
information regarding the interests of participants in the solicitation
of proxies in connection with the proposed merger will be included in
the proxy statement/prospectus.
No Offer or Solicitation
This communication is for informational purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of any vote or approval, in any
jurisdiction, pursuant to the proposed merger or otherwise, nor shall
there be any sale, issuance, exchange or transfer of the securities
referred to in this document in any jurisdiction in contravention of
applicable law. No offer of securities shall be made except by means of
a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
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