8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+4

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Material Agreement (Oct 1, 2014)

Filed October 1, 2014For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) announced a significant acquisition on October 1, 2014, through its operating subsidiary, Enterprise Products Operating LLC (EPO). EPD acquired approximately 66% of Oiltanking Partners, L.P. (Oiltanking), including common and subordinated units, as well as the general partner interest (GP Equity) that holds incentive distribution rights. This transaction, valued at approximately $4.4 billion, was financed through a combination of $2.21 billion in cash and the issuance of 54.8 million EPD common units to the seller, Oiltanking Holding Americas, Inc. The acquisition was further supported by EPO entering into a $1.5 billion 364-day revolving credit facility to help fund the transaction. EPD also announced a proposed merger with Oiltanking, aiming for a full consolidation of the entity. This acquisition substantially increases EPD's stake in Oiltanking, enhancing its control and potential for operational synergies. The use of both cash and EPD common units in the transaction diversifies the financing. The proposed merger, if completed, would represent a significant step towards full integration and potentially streamline operations and governance. Investors should monitor the progress and terms of the proposed merger and the performance of the acquired Oiltanking assets within EPD's broader portfolio.

Key Highlights

  • 1Acquisition of approximately 66% of Oiltanking Partners, L.P. (Oiltanking) for approximately $4.4 billion.
  • 2Transaction financed by $2.21 billion in cash and the issuance of 54.8 million EPD common units.
  • 3Acquisition includes Oiltanking common units, subordinated units, and the Oiltanking general partner (GP) interest.
  • 4EPO entered into a $1.5 billion 364-day revolving credit agreement to help finance the acquisition.
  • 5EPD announced a proposed merger to acquire the remaining Oiltanking units.
  • 6F. Christian Flach, CEO of M&B (seller's parent), appointed to EPD's board of directors.
  • 7EPD granted registration rights to the seller for the EPD common units issued as consideration.

Frequently Asked Questions

This 8-K filing primarily announced the completion of Enterprise Products Partners L.P.'s (EPD) acquisition of a significant stake in Oiltanking Partners, L.P. (Oiltanking) and the entry into a new revolving credit agreement.

The acquisition was financed through a combination of approximately $2.21 billion in cash and the issuance of 54,807,352 EPD common units to the seller. Additionally, Enterprise Products Operating LLC (EPO), EPD's subsidiary, entered into a $1.5 billion 364-day revolving credit agreement, which was partly used to fund the acquisition.

The proposed merger aims to fully integrate Oiltanking into EPD's operations. This would simplify the capital structure, potentially lead to cost savings, and allow EPD to realize the full benefits of Oiltanking's assets and operations under unified control. The terms of the merger would involve an exchange of Oiltanking units for EPD units.

The $1.5 billion 364-day revolving credit agreement provides EPO with short-term financing flexibility, with an option to extend the maturity. It helps ensure sufficient liquidity to fund the significant acquisition while management assesses longer-term financing needs or integrates the acquired assets.