Shares of SemGroup (SEMG - Get Report) soared 63.3% to $16.79 Monday after the oil and gas pipeline and processing plant company agreed to be acquired by Energy Transfer (ET - Get Report) in a transaction that prices the Tusla, Oklahoma-based Semgroup at about $1.35 billion.
Under the terms of the agreement, which has been unanimously approved by the boards of both companies, SemGroup shareholders will receive $6.80 a share in cash and 0.7275 of an Energy Transfer common unit for each SemGroup share, or about 40% cash and 60% equity.
Shares of Energy Transfer fell 2.3% to $13.70.
"This strategically and financially compelling combination will result in SemGroup joining one of the largest midstream energy companies in the country, with a strong footprint in all major U.S. production basins," SemGroup CEO Carlin Conner said in a statement.
Energy Transfer said the acquisition of SemGroup "will increase Energy Transfer's scale across multiple regions and provide increased connectivity for Energy Transfer's crude oil and NGL transportation businesses."
The transaction, which is expected to have no material impact on credit metrics, Energy Transfer said, increases Energy Transfer's portion of fee-based cash flows from fixed-fee contracts and is expected to be immediately accretive to distributable cash flow per common unit.
The transaction is expected to close later this year or in early 2020.