Energy Transfer LP (Energy Transfer) announced that it has gone into merger agreement with Enable Midstream Partners LP (Enable) to acquire all the equities of the second at a value of $7.2 billion, a press release reported.
According to the terms of the agreements, Enable common unitholders will receive 0.8595 ET common units for each Enable common unit, an exchange ratio that represents an at-the-market transaction, based on the 10-day volume-weighted average price of ET and Enable common units on February 12, 2021. In addition, each outstanding Enable Series A preferred unit will be exchanged for 0.0265 Series G preferred units of Energy Transfer. The transaction will include a $10 million cash payment for Enable’s general partner.
The statement elaborated that this agreement will help in reducing efforts of debts, impact positively in the credit metrics and add significant fee-based cash flows from fixed-fee contracts. Additionally, this combination will expand Energy Transfer’s spread across multiple regions as well as pursue commercial opportunities and achieve cost savings.
Energy Transfer expects that the combined company would generate more than $100 million of annual run-rate cost and efficiency synergies.