Energy Transfer Partners LP To Acquire Sunoco Inc For $5.3 Billion

Energy Transfer Partners LP (ETP) and Sunoco Inc announced that they have entered into a definitive merger agreement whereby ETP will acquire Sunoco in a unit and cash transaction valued at $50.13 per share, or a total consideration of approximately $5.3 billion, based on ETP’s closing price on April 27, 2012. The merger consideration, which consists of $25 in cash and 0.5245 of an ETP common unit, or approximately 50% cash and 50% ETP common units. Under the terms of the agreement Sunoco shareholders can elect to receive, for each Sunoco common share they own, either $50.00 in cash, 1.0490 ETP common units or a combination of $25.00 in cash and 0.5245 ETP common units. The aggregate cash paid and common units issued will be capped so that cash and common units will each represent 50% of the aggregate consideration. Upon closing Sunoco shareholders are expected to own approximately 20% of ETP common units. In addition $965 million of Sunoco’s existing notes will remain outstanding. In conjunction with the transaction Energy Transfer Equity, L.P. owner of Energy Transfer Partners’ general partner has agreed to relinquish its right to approximately $210 million of incentive distributions from ETP that it would otherwise be entitled to receive over 12 consecutive quarters following the closing of transaction. The transaction is expected to close in the third or fourth quarter of 2012. Sunoco Logistics Partners will continue to traded on NYSE as a separate publicly traded MLP.