Enbridge IncEnbridge agrees to acquire Tallgrass's crude oil business for $2.55 billion, adding fee-based pipeline, storage and marketing assets that should be accretive to distributable cash flow per share.
Enbridge Inc. has agreed to buy Blackstone-owned Tallgrass Energy's crude oil business for $2.55 billion in cash, expanding its presence in the U.S. liquids pipeline market. The deal includes a 75% stake in the 1,050-mile Pony Express Pipeline, a 51% interest in the Powder River Gateway system, around 8.4 million barrels of storage capacity and crude marketing operations. Pony Express can move roughly 460,000 barrels of crude per day between the Rockies and the Cushing, Oklahoma, hub, and the acquisition also gives Enbridge greater exposure to major producing regions including the Bakken, Powder River and Denver-Julesburg basins. Enbridge expects the assets to generate significant free cash flow and says the transaction should add to distributable cash flow per share in the first full year after closing, fitting its broader strategy of growing fee-based energy infrastructure backed by its C$41 billion secured growth backlog. Reuters reported that Enbridge plans to partly fund the deal through an equity offering, which could dilute existing shareholders, and the deal is valued at roughly 10–11 times forward EBITDA.
Enbridge IncEnbridge agrees to acquire Tallgrass's crude oil business for $2.55 billion, adding fee-based pipeline, storage and marketing assets that should be accretive to distributable cash flow per share.
Blackstone Group IncBlackstone-owned Tallgrass Energy is selling its crude oil business for $2.55 billion, a profitable exit for the Blackstone portfolio company.
Tallgrass Energy is selling its crude oil business to Enbridge for $2.55 billion in cash.