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ETP and Sunoco complete dropdown of fuel and retail marketing assets

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Hydrocarbon Engineering,

Energy Transfer Partners, L.P. (ETP) and Sunoco LP (SUN) have completed the previously announced dropdown to SUN of the remaining 68.42% interest in Sunoco, LLC and 100% interest in Sunoco Retail LLC, which owns the legacy Sunoco convenience store business, for approximately US$2.226 billion.

The transaction has an effective date of 1 January 2016 and is expected to be accretive to distributable cash flow and expected distributions per unit for SUN in 2016 and thereafter.

SUN paid ETP approximately US$2.2 billion in cash including the expected value of working capital and issued to ETP 5 710 922 million SUN common units valued at approximately US$194 million based on the five day volume weighted average price of SUN's common units as of 13 November 2015. In connection with the closing of the acquisition, SUN entered into a US$2.035 billion senior secured term loan facility to fund a portion of the cash consideration for the acquisition, with the remaining portion funded with borrowings under SUN's revolving credit facility.

This final dropdown completes a total of US$5.7 billion of dropdowns from ETP to SUN since the fourth quarter of 2014, transforming into one of the leading wholesale fuel and retail marketing platforms in the US, with tremendous geographic scale and a unique diversity of business drivers.

Simultaneously with the closing of the acquisition, SUN completed its previously announced sale of 2 263 518 SUN common units to Energy Transfer Equity, L.P. (ETE) and received US$64.5 million in proceeds which were used to repay borrowings under SUN's revolving credit facility.

Adapted from press release by Rosalie Starling

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