Energy Transfer Acquires SemGroup for Cash and Common Units

Updated 1 year 9 months ago

On September 16, 2019, Energy Transfer entered into a definitive merger agreement to acquire SemGroup in a unit and cash transaction valued at $17.00 per share, or a total consideration including the assumption of debt of approximately $5.1 billion, based on the closing price of ET common units on September 13, 2019.

The merger consideration consists of 6.80 in cash and 0.7275 of an ET common unit for each outstanding share of class A common stock of SemGroup, or 40% cash and 60% equity. This represents a 65% premium to the closing price of SemGroup shares as of September 13, 2019. The transaction is expected to close in late 2019 or early 2020, subject to the approval by SemGroup’s stockholders and regulatory approvals. Upon closing, SemGroup stockholders are expected to own approximately 2.2% of Energy Transfer’s outstanding common units.

The Seminole Group was founded in 2000 with funding from Energy Spectrum Capital and was later renamed SemGroup. The company listed publicly in 2007 and completed a financial restructuring in 2009. The company acquired Rock Rose Midstream in 2016 and Houston Fuel Oil Terminal in 2017. SemGroup shareholders approved the transaction on December 4, 2019 with shareholders receiving $6.80 in cash and 0.7275 of an Energy Transfer common unit for each share. The transaction closed on December 5, 2019.