Pipeline operator Energy Transfer to buy rival Southern Union for $4.1 billion

Energy Transfer Equity LP said that it will acquire smaller rival Southern Union Co for about $4.1 billion to become the largest natural gas pipeline company in the US and a $40 billion group of natural gas midstream company.

The deal will see Dallas-based Energy Transfer nearly double its capacity through what is billed as the largest buyout of a pipeline company this year.
 
The deal will also see billionaire investor Carl Icahn's stake in Southern Union rise to $6.1 million, netting him a a windfall profit of $1.7 million from the stake he had bought in March 2011.

Under the deal announced yesterday, Houston-based Southern Union will get new units worth $33 each or approximately $4.2 billion, representing a 17 per cent premium to yesterday's closing price. 

Energy Transfer will also will assume Southern Union's debt of $3.7 billion.

Southern Union is one of the nation's leading diversified natural gas companies, engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas.
 
The company owns and operates one of the nation's largest natural gas pipeline systems with more than 20,000 miles of pipelines and one of North America's largest liquefied natural gas import terminals, serving more than half a million natural gas end-user customers in Missouri and Massachusetts.

The acquisition of Southern Union, one of the leading diversified natural gas companies in the US, will give Energy Transfer with direct ownership of assets that are complementary to the assets owned and operated by its own two master limited partnership subsidiaries, Energy Transfer Partners and Regency Energy Partners.