In a surprising turn of events, Sunoco LP and NuStar Energy L.P. have announced a definitive agreement that will see Sunoco acquiring NuStar in a deal valued at approximately $7.3 billion, including assumed debt. This all-equity transaction marks a significant move in the energy sector, with Sunoco poised to expand its reach and capabilities through the acquisition of NuStar’s assets and resources.
Under the terms of the agreement, NuStar common unitholders will receive 0.400 Sunoco common units for each NuStar common unit they hold. This exchange ratio represents a 24% premium based on the 30-day Volume-Weighted Average Prices (VWAPs) of both NuStar and Sunoco as of January 19, 2024. This premium reflects the confidence of both companies in the strategic value of the transaction and the potential for future growth and synergy.
To facilitate the transaction, Sunoco has secured a $1.6 billion 364-day bridge term loan. This loan will be used to refinance NuStar’s Series A, B, and C Preferred Units, Subordinated Notes, Revolving Credit Facility, and Receivables Financing Agreement. The move demonstrates Sunoco’s commitment to ensuring a smooth transition and maintaining financial stability throughout the acquisition process.
The transaction has received unanimous approval from the boards of directors of both companies, signaling strong support for the strategic vision behind the deal. It is expected to close in the second quarter of 2024, pending the satisfaction of closing conditions. These conditions include approval by NuStar’s unitholders and customary regulatory approvals, highlighting the commitment of both companies to ensuring a transparent and compliant process.
Once finalized, the acquisition is poised to reshape the competitive landscape in the energy sector, positioning Sunoco as a formidable player with enhanced capabilities and a broader footprint. The combined strengths of Sunoco and NuStar are expected to create significant value for shareholders and stakeholders alike, ushering in a new era of growth and opportunity for both companies.
(Source: MarketWatch | PR Newswire | Chronicle Tribune)
