This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
Kinder Morgan, Inc. (NYSE: KMI) today announced that it has completed its acquisition of El Paso Corporation (NYSE: EP), which was announced in October of 2011. Combining the two companies makes Kinder Morgan the largest midstream and the fourth largest energy company (based on combined enterprise value) in North America. Under the terms of the agreement, the transaction will be effective as of 12:01 a.m., New York City time, on May 25, 2012.
“We are delighted to close the El Paso transaction and we are very excited about the natural gas footprint that we now have in the United States with the addition of approximately 44,000 miles of natural gas pipelines from El Paso,” Richard D. Kinder, chairman and CEO of Kinder Morgan stated. “We are bullish on the future of natural gas and believe that it will be the fuel of choice in America for many years to come. It’s domestically abundant, clean and cheap. As the largest transporter and storage operator of natural gas in the United States, we have many growth opportunities across the country, and we are eager to get to work to leverage these assets for the benefit of our customers, our shareholders and our employees.”
Sale of Exploration and Production Assets Completed
The approximately $7.15 billion sale of El Paso’s exploration and production business (EP Energy) to affiliates of Apollo Global Management, LLC and others, which was announced in late February, has also closed. As previously announced, El Paso’s net operating loss carryforwards will largely offset taxes associated with the sale of the exploration and production business, and thus almost the entire proceeds from this sale will be used to reduce substantially the debt incurred by KMI to fund the cash portion of its purchase of El Paso.
Integration and Growth Expectations
“I’m very pleased with the herculean effort that has occurred over the past several months to combine Kinder Morgan and El Paso,” Kinder said. “The integration planning effort was managed and fully staffed by personnel from the two organizations, ensuring that the people who understand best how to operate these assets are establishing how they will be managed moving forward. This has required a tremendous amount of work by a large number of people who are still responsible for their normal jobs. The value of their contributions will be realized by the combined organization for many years to come.”