The role shale oil production in the United States continues to drive the growth of the energy sector. One of its beneficiaries, shareholders of Copano, a midstream natural gas provider took the drive a step further by merging with Kinder Morgan Energy Partners. The merger was announced in January 2013 but the 99% approval required was completed last Tuesday.
The deal is an all-stock exchange valued at US3.2 billion, but when company debt is included, the total transaction would be worth US$5 billion. The transaction would involve Kinder Morgan's acquisition of all of Copano outstanding share units at an exchange rate of one Copano unit for 0.4563 of Kinder Morgan units.
The largest shareholder in Copano is TPG Capital holding a 14% stake in the company. It agreed to the sale based on the 41% premium it is expecting in return for the US$300 million investment it had made back in 2010.
As for operational matters, Kinder Morgan Energy announced last January that it is expecting to retain 'a vast majority' of the 415 individuals employed in Copano.
Join the Conversation