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ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Material Agreement (Sep 7, 2010)

Filed September 7, 2010For Securities:EPDEPDU

Summary

This 8-K filing by Enterprise Products Partners L.P. (EPD) announces the entry into definitive merger agreements to combine EPD with Enterprise GP Holdings L.P. (Holdings) in a two-step transaction. The primary objective is to simplify the corporate structure by eliminating the Holdings entity. The transaction involves a merger of Holdings' general partner with EPD's general partner, followed by a merger of Holdings with a subsidiary of EPD, ultimately converting Holdings' common units into EPD common units. This aims to enhance operational efficiencies and potentially improve investor perception of the combined entity. Key to this transaction is the exchange ratio, where Holdings unitholders will receive 1.5 EPD common units for each Holdings unit. Additionally, the existing general partner interest and incentive distribution rights (IDRs) held by Holdings in EPD will be cancelled. The filing also details various conditions for closing the merger, including unitholder approval from Holdings and regulatory clearances, with a target completion date of December 31, 2010. The transaction is supported by affiliated unitholders who control a significant majority of Holdings' units.

Key Highlights

  • 1EPD and Enterprise GP Holdings L.P. (Holdings) have entered into definitive merger agreements to combine the two entities.
  • 2The transaction is structured as a two-step merger: a GP merger followed by an MLP merger, simplifying the corporate structure.
  • 3Holdings unitholders will receive 1.5 EPD common units for each Holdings unit held.
  • 4Existing general partner interest and incentive distribution rights (IDRs) held by Holdings in EPD will be cancelled as part of the merger.
  • 5The merger is subject to customary closing conditions, including approval by Holdings unitholders and regulatory approvals.
  • 6A support agreement from affiliated unitholders ensures the necessary votes from Holdings unitholders for merger approval.
  • 7The combined entity aims to achieve greater operational efficiencies and a simpler structure for investors.

Frequently Asked Questions

The main purpose is to simplify Enterprise Products Partners L.P.'s (EPD) corporate structure by combining it with Enterprise GP Holdings L.P. (Holdings). This simplification is expected to lead to improved operational efficiencies and a more straightforward investment profile for unitholders.

Holdings unitholders will receive 1.5 common units of Enterprise Products Partners L.P. (EPD) for each Holdings unit they own. Fractional units will be settled in cash.

As part of the merger, the current 2% economic general partner interest and all incentive distribution rights (IDRs) in EPD that are held by Holdings will be cancelled.

Key conditions include approval of the merger agreement by a majority of Holdings unitholders, receipt of necessary regulatory approvals, effectiveness of a registration statement for the EPD common units to be issued, and completion of the GP merger. The merger is expected to close by December 31, 2010.