Energy Transfer LP will buy SemGroup Corp for $1.35 billion and plans to build a 75-mile oil pipeline to strengthen its oil transportation, terminaling and export operations, Energy Transfer said on Monday.
After the purchase, Energy Transfer will gain control of SemGroup’s crude oil terminal on the Houston Ship Channel. The company plans to construct a pipeline between SemGroup’s crude oil terminal and Energy Transfer’s Nederland, Texas terminal.
Energy Transfer will also add SemGroup’s crude oil gathering assets in the DJ Basin in Colorado and the Anadarko Basin in Oklahoma and Kansas, as well as crude oil and natural gas liquids pipelines connecting the DJ Basin and Anadarko Basin with terminals in Cushing, Oklahoma.
The transaction is expected to close in late 2019 or early 2020. Including SemGroup’s debt, the enterprise value of the deal is $5 billion. The deal, which includes $6.80 in cash and 0.7275 shares of Energy Transfer for each outstanding share of SemGroup, represents a premium of 65.4% to SemGroup’s Friday close.