Pipeline operator MPLX to buy MarkWest

The pipeline operator MPLX announced yesterday that it had agreed to acquire MarkWest Energy Partners.

MPLX – a partnership controlled by Marathon Petroleum Corp., a refinery and pipeline company – will buy MarkWest Energy Partners LP for US$15.billion. The deal will combine two companies.

MPLX, based in Findlay, Ohio, was created in 2012 by Marathon Petroleum to own and operate pipelines and other so-called midstream assets. Its assets include 2900 miles of pipeline in nine states; it posted revenue of US$548.3 million in 2014.

The newly formed company would have a market capitalisation of about US$21 billion.

Under the terms of the deal, MarkWest shareholders would receive the equivalent of US$78.64 a share in cash and shares, representing a 32% premium to the company’s closing price on Friday.

“This combination is a significant step in executing MPC’s strategy to grow its higher-valued, stable cash flow midstream business, by transforming MPLX into a large-cap, diversified master limited partnership,” Gary R. Heminger, the Marathon Petroleum President and Chief Executive, said in a statement.

Edited from various sources by Elizabeth Corner

Sources: Financial Times, Wall Street Journal, New York Times

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