Summary
Kinder Morgan, Inc. (KMI) has filed an 8-K report detailing a significant event related to its proposed merger with El Paso Corporation. Specifically, the filing concerns the entry into a Purchase and Sale Agreement for El Paso's exploration and production (E&P) assets, referred to as the "EP Energy Sale." These assets are to be sold to EPE Acquisition, LLC, an entity affiliated with Apollo Global Management, Riverstone Holdings LLC, and Access Industries, for approximately $7.15 billion. This divestiture is a critical component of the overarching merger agreement between Kinder Morgan and El Paso, which was initially announced in October 2011. The closing of the EP Energy Sale is contingent upon the successful completion of the Kinder Morgan-El Paso merger, with both transactions anticipated to conclude in the second quarter of 2012. Investors should note that the sale is subject to customary closing conditions, including antitrust clearance, and there is a provision for a $400 million termination fee payable by Kinder Morgan under certain circumstances.
Key Highlights
- 1Kinder Morgan (KMI) is involved in the sale of El Paso Corporation's exploration and production (E&P) assets (EP Energy Sale).
- 2The EP Energy Sale is for approximately $7.15 billion in cash, subject to adjustments.
- 3The buyer of the E&P assets is EPE Acquisition, LLC, an entity affiliated with Apollo Global Management, Riverstone Holdings LLC, and Access Industries.
- 4The EP Energy Sale is a condition precedent to the closing of the Kinder Morgan merger with El Paso.
- 5Both the EP Energy Sale and the Kinder Morgan-El Paso merger are expected to close in the second quarter of 2012.
- 6The transaction is subject to customary closing conditions, including antitrust clearance.
- 7A termination fee of $400 million may be payable by Kinder Morgan under certain circumstances related to the EP Energy Sale.