Kinder Morgan Inc. will buy out three companies it controls for $44 billion in cash and stock, the company announced on Sunday. Kinder Morgan Chairman and CEO Richard Kinder told FuelFix the move would enhance the company’s growth by eliminating cash payouts made to Kinder Morgan Inc. by its pipeline and terminal companies, Kinder Morgan Energy Partners and El Paso Pipeline Partners. Freeing up cash paid to the parent company will allow the firms to invest in building more energy infrastructure — particularly pipeline systems that deliver natural gas from the Marcellus and Utica shales to the Gulf Coast.
Kinder Morgan Inc. is also buying out Kinder Morgan Management, LLC. The parent firm will assume $27 billion in debt.
“This transaction dramatically simplifies the Kinder Morgan story by simplifying from four separately traded equity securities today to one security going forward, and by eliminating the incentive distribution rights and structural subordination of debt,” Kinder said in a company news release.
As FuelFix notes, it is the largest energy transaction in the U.S. since Exxon acquired Mobil for $74.5 billion in 1999. The deal is expected to close by the end of the year.
