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Tuesday, July 14, 2015

MPLX and MarkWest Agree to $15.8 Billion Merger Deal

From Oil & Gas Journal:
MPLX LP, a Findlay, Ohio-based master limited partnership (MLP) formed by Marathon Petroleum Corp. in 2012, and Denver-based MarkWest Energy Partners LP have agreed to a unit-for-unit merger deal in which MarkWest will become a wholly owned subsidiary of MPLX. The deal, valued at $15.8 billion in stock and cash excluding debt, is expected to close in the fourth quarter. 
The companies describe the deal as one combining the nation’s second-largest processor of natural gas and largest processor and fractionator in the Marcellus and Utica shale plays in MarkWest with a growing crude oil and refined products logistics partnership in MPLX. They say the deal will create the fourth-largest MLP based on a market capitalization of $21 billion. 
MPLX assets consist of 99.5% equity interest in a network of common carrier crude oil and products pipeline assets in the Midwest and Gulf Coast regions and 100% interest in a butane storage cavern located in West Virginia with 1 million bbl of NGL storage capacity. 
The combined entity will further MarkWest’s midstream presence in the Marcellus and Utica by allowing it to pursue additional midstream projects, the companies say. The deal also provides vertical integration opportunities, as Marathon is a large consumer of NGLs.
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