Back to top

Sunoco Logistics Inks Deal to Buy Energy Transfer for $21B

Read MoreHide Full Article

Sunoco Logistics Partners L.P. has recently entered into a merger agreement to acquire pipeline operator Energy Transfer Partners, L.P. (ETP - Free Report) in a unit-for-unit transaction worth $21.3 billion.

Under the terms of the transaction, unitholders of Energy Transfer will receive 1.5 common units of Sunoco for each common unit of Energy Transfer they own.  Post the merger, Dallas-based Energy Transfer Partners will remain the overall parent of the combined entity. The deal is expected to close early next year, subject to approval by shareholders of Energy Transfer, and other customary closing conditions.

This merger is expected to create several commercial synergies, and result in $200 million worth of annual costs savings by 2019. The transaction is also expected to strengthen the financials of the combined organization by making use of cash distribution savings to lower debt and to finance a portion of the growth capital expenditure programs of the combined entity.

Philadelphia-based Sunoco Logistics, a master limited partnership, acquires, owns, and operates a geographically diverse portfolio of refined product and crude oil pipelines and terminal facilities.

Recently, the company along with ExxonMobil Corporation (XOM - Free Report) announced their decision to form a strategic joint venture (“JV”) by combining their key crude oil midstream assets, mainly in the Permian basin of West Texas. Sunoco Logistics will be the majority owner and operator of the JV assets with a stake of 85%, while ExxonMobil will hold the remaining 15%.


Sunoco Logistics currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.

A better-ranked player from the broader energy sector includes Braskem S.A. (BAK - Free Report) . The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.

Now See Our Private Investment Ideas

While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Energy Transfer Partners, L.P. (ETP) - free report >>

Exxon Mobil Corporation (XOM) - free report >>

Braskem S.A. (BAK) - free report >>

More from Zacks Analyst Blog

You May Like