Energy Transfer Submits HSR Act Filing In Connection With WTG Acquisition

Rhea-AI Summary

Energy Transfer LP (NYSE: ET) has submitted its premerger notification filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for its acquisition of WTG Midstream Holdings. The purchase price for WTG has been adjusted to approximately $3.075 billion, excluding a 20% interest in the BANGL pipeline, which was subject to a right of first offer. The acquisition is expected to close in Q3 2024, pending regulatory approval. Energy Transfer anticipates accretion of $0.04 per common unit in 2025 and $0.07 in 2027. WTG owns the largest private gas gathering and processing business in the Permian Basin. This acquisition will enhance Energy Transfer's access to natural gas and NGL volumes, benefiting their Permian operations and downstream businesses.

Positive

• Premerger notification filed under HSR Act.
• Purchase price for WTG set at approximately $3.075 billion.
• Expected accretion of $0.04 per common unit in 2025 and $0.07 in 2027.
• WTG owns the largest private gas gathering and processing business in the Permian Basin.
• Transaction expected to close in Q3 2024, pending regulatory approval.
• Increased access to natural gas and NGL volumes.
• Enhanced Permian operations and downstream businesses.

Negative

• 20% interest in BANGL pipeline will not be included in the transaction.
• Transaction subject to receiving HSR Act clearance and customary closing conditions.

Insights

Financial Analyst

The recent filing under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) for Energy Transfer's (ET) acquisition of WTG Midstream Holdings LLC (WTG) signifies a progression towards finalizing the transaction. The revised purchase price of $3.075 billion, deducting the 20% interest in the BANGL pipeline, is significant. ET expects this acquisition to be accretive to its earnings, projecting an increase of $0.04 per common unit in 2025, escalating to $0.07 per unit by 2027. For shareholders, this potential for increased earnings per share (EPS) presents a positive long-term financial outlook. However, with the transaction expected to close in the third quarter of 2024, short-term impacts may be minimal. Investors should closely monitor the HSR clearance and the subsequent integration of WTG's assets.

Rating: 1

Market Research Analyst

The acquisition of WTG by Energy Transfer is poised to significantly bolster ET’s market position in the Permian Basin. WTG’s assets, located in the core of the Midland Basin, provide ET with increased access to vital natural gas and natural gas liquids (NGL) volumes. This strategic move not only enhances ET’s downstream businesses but also strengthens its presence in one of the most prolific oil and gas regions in the U.S. For investors, the long-term growth potential in this high-yield area is promising. Yet, understanding the potential risks associated with this acquisition, such as integration challenges and market volatility, is crucial.

Rating: 1

Provides Update on BANGL Pipeline Interest

DALLAS--(BUSINESS WIRE)-- Energy Transfer LP (NYSE: ET) announced that it recently submitted its premerger notification filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) in connection with its previously announced acquisition of WTG Midstream Holdings LLC (WTG).

In addition, Energy Transfer announced that the 20% interest in the BANGL pipeline, which was subject to a right of first offer, will not be included in the transaction. As a result, the purchase price for WTG has been revised to approximately $3.075 billion. Energy Transfer continues to expect accretion of $0.04 per common unit in 2025, increasing to $0.07 per common unit in 2027.

Energy Transfer continues to expect the transaction to close in the third quarter of 2024, subject to receiving HSR Act clearance and customary closing conditions.

WTG owns and operates the largest private Permian Basin gas gathering and processing business with assets located in the core of the Midland Basin. The addition of WTG assets is expected to provide Energy Transfer with increased access to growing supplies of natural gas and NGL volumes enhancing the partnership’s Permian operations and downstream businesses.

About Energy Transfer

Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with more than 125,000 miles of pipeline and associated energy infrastructure. Energy Transfer’s strategic network spans 44 states with assets in all of the major U.S. production basins. Energy Transfer is a publicly traded limited partnership with core operations that 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; and NGL fractionation. Energy Transfer also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and approximately 21% of the outstanding common units of Sunoco LP (NYSE: SUN), and the general partner interests and approximately 39% of the outstanding common units of USA Compression Partners, LP (NYSE: USAC). For more information, visit the Energy Transfer LP website at www.energytransfer.com.

Forward Looking Statements

This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in the Partnership’s Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

The information contained in this press release is available on our website at energytransfer.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240617994908/en/

Energy Transfer

Investor Relations:

Bill Baerg

Brent Ratliff

Lyndsay Hannah

(214) 981-0795



Media Relations:

Vicki Granado

(214) 840-5820

Source: Energy Transfer LP

FAQ

What is the current status of Energy Transfer's acquisition of WTG?

Energy Transfer has submitted its premerger notification filing under the HSR Act for the acquisition of WTG.

What is the revised purchase price for WTG?

The revised purchase price for WTG is approximately $3.075 billion.

When is the acquisition of WTG expected to close?

The acquisition is expected to close in the third quarter of 2024, pending regulatory approval.

What financial impact will the acquisition have on Energy Transfer's common units?

Energy Transfer anticipates accretion of $0.04 per common unit in 2025 and $0.07 per common unit in 2027.

Why is the 20% interest in the BANGL pipeline not included in the transaction?

The 20% interest in the BANGL pipeline is excluded due to a right of first offer.

How will the acquisition of WTG benefit Energy Transfer?

The acquisition will enhance Energy Transfer's access to natural gas and NGL volumes, benefiting their Permian operations and downstream businesses.