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Phillips 66 agrees to acquire Phillips 66 Partners

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Hydrocarbon Engineering,

Phillips 66 (PSX) and Phillips 66 Partners (PSXP or the partnership) have announced that they have entered into a definitive agreement for Phillips 66 to acquire all of the publicly held common units representing limited partner interests in the partnership not already owned by Phillips 66 and its affiliates.

The agreement, expected to close in 1Q22, provides for an all-stock transaction in which each outstanding PSXP common unitholder would receive 0.50 shares of PSX common stock for each PSXP common unit. The partnership’s preferred units would be converted into common units at a premium to the original issuance price prior to exchange for Phillips 66 common stock.

“We are announcing an agreement to acquire all outstanding units of Phillips 66 Partners,” said Greg Garland, Chairman and CEO of Phillips 66. “We believe this acquisition will allow both PSX shareholders and PSXP unitholders to participate in the value creation of the combined entities, supported by the strong financial position of Phillips 66.”

The transaction value of the units being acquired is approximately US$3.4 billion based on 26 October 2021 market closing prices of both companies. Upon closing, the partnership will be a wholly owned subsidiary of Phillips 66 and will no longer be a publicly traded partnership. Phillips 66 Project Development Inc., a wholly owned subsidiary of Phillips 66 and the holder of a majority of the outstanding common units of the partnership, has voted its units to approve the transaction.

Citi and BofA Securities, Inc. are acting as financial advisors to Phillips 66, and Latham & Watkins LLP is acting as Phillips 66’s legal advisor.

The terms of the transaction were unanimously approved by the board of directors of the general partner of Phillips 66 Partners based on the unanimous approval and recommendation of its conflicts committee, comprised entirely of independent directors. The conflicts committee engaged Evercore as its financial advisor and Vinson & Elkins L.L.P. as its legal advisor.

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