Kinder will get around $1.6 billion in cash as well as 25 million shares of Pembina, valued at close to $925 million.
In addition, Pembina will purchase all outstanding shares of Kinder Morgan Canada Limited. That will also include the acquisition of the 70% of KML that Kinder Morgan currently owns.
Each part of the deal is dependent on the other happening. The company said the deals are "are cross-conditioned upon each other."
The deals are expected to be completed in the fourth quarter or by the end of the first quarter of 2020, subject to approvals by regulators.
"It [the deal] enables KMI to reduce leverage and gives us the flexibility to create additional value for shareholders through share buybacks, project investments, or both," said Kinder Morgan CEO Steve Kean.
Kinder Morgan shares were up 1.24% to $20.39 in trading Wednesday.
Save 57% With Our Labor Day Sale. Join Jim Cramer's Action Alerts PLUS investment club to become a smarter investor! Click here to sign up!
Constable owns none of the securities listed in this story.