Date
17 August 2017
Kinder Morgan helped pioneer the master limited structure that allows companies to enjoy certain tax benefits. The merger goes against an industry trend toward spin-offs of infrastructure units. Photo: Bloomberg
Kinder Morgan helped pioneer the master limited structure that allows companies to enjoy certain tax benefits. The merger goes against an industry trend toward spin-offs of infrastructure units. Photo: Bloomberg

Kinder Morgan merges oil, gas, pipeline partnerships

Kinder Morgan Inc. (KMI) will merge its oil and natural gas storage and pipeline partnerships under t in a US$70 billion deal that creates the largest energy infrastructure company on the largest midstream energy company in North America.

KMI will buy all the outstanding shares of Kinder Morgan Energy Partners LP, Kinder Morgan Management LLC and El Paso Pipeline Partners LP, all of which are controlled by the corporation, Bloomberg reported Sunday, citing an official statement.

Kinder, which helped pioneer the master limited partnership (MLP) structure, has been under pressure from investors to consolidate or find other ways to grow.

The deal will simplify the Kinder empire and create a single publicly traded corporation with an enterprise value of US$140 billion.

It runs counter to an industry trend of spinning off infrastructure segments as MLPs for tax purposes, the report said.

MLPs trade in units rather than shares. Holders of Kinder Morgan Partners and El Paso will have the option of taking cash or KMI shares in return for their units, Houston-based Kinder said.

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