8-KMaterial AgreementsSecurities & ListingExhibits & Filings

Energy Transfer LP 8-K Report, Material Agreement (Aug 3, 2018)

Filed August 3, 2018For Securities:ETET-PI

Summary

This 8-K filing from Energy Transfer LP (ET) announces a significant definitive agreement for a merger between Energy Transfer Equity, L.P. (ETE) and Energy Transfer Partners, L.P. (ETP). ETE's wholly-owned subsidiary, Streamline Merger Sub, LLC, will merge with ETP, with ETP continuing as a subsidiary of ETE. The merger is structured such that ETP common unitholders will receive 1.28 ETE common units for each ETP common unit they hold. This transaction aims to simplify the corporate structure and potentially streamline operations and financial reporting under a single entity. The filing outlines the terms of the merger, including the exchange ratio, treatment of various ETP unit classes and awards, and the issuance of special Class A units to ETE GP to maintain voting control for ETE's general partner. The completion of the merger is contingent on customary closing conditions, including unitholder approvals, regulatory clearances (e.g., HSR Act), and the effectiveness of a registration statement. The agreement includes provisions regarding the solicitation of competing proposals and termination fees, with ETP potentially owing ETE a termination fee of up to $750 million under certain circumstances. Investors should note the forward-looking statements and the cautionary advice regarding relying on the representations and warranties made within the merger agreement itself.

Key Highlights

  • 1Energy Transfer Equity (ETE) and Energy Transfer Partners (ETP) have entered into a definitive merger agreement.
  • 2ETP will merge with a subsidiary of ETE, with ETP surviving as a subsidiary of ETE.
  • 3ETP common unitholders will receive 1.28 ETE common units for each ETP common unit held.
  • 4The transaction is structured as a "take-under" where ETE is acquiring ETP.
  • 5Completion of the merger is subject to customary closing conditions, including ETP unitholder approval and regulatory approvals.
  • 6A termination fee of up to $750 million may be payable by ETP to ETE under specific circumstances.
  • 7ETE GP will receive special Class A units to maintain its voting interest in the combined entity.

Frequently Asked Questions

The primary goal of this merger agreement is to combine Energy Transfer Partners (ETP) into Energy Transfer Equity (ETE) through a subsidiary merger. This is expected to simplify the overall corporate structure of Energy Transfer.

Each common unit of ETP outstanding will be converted into 1.28 common units of ETE, subject to certain conditions and exclusions.

Key conditions include approval by ETP common unitholders (including a majority of unaffiliated common unitholders), expiration of the HSR Act waiting period, listing of ETE common units on the NYSE, effectiveness of a registration statement on Form S-4, and other customary closing conditions.

Yes, under certain circumstances outlined in the merger agreement, ETP may be required to pay ETE a termination fee of up to $750 million, less any prior reimbursements.