What is the main purpose of these merger agreements?

The main purpose of these merger agreements is to simplify Kinder Morgan's (KMI) complex corporate structure by consolidating its publicly traded partnerships (KMP, KMR, and EPB) into a single, unified entity under KMI. This is expected to streamline operations, improve financial flexibility, and potentially reduce overhead costs.

What will KMP and EPB unitholders receive in the mergers?

KMP and EPB common unitholders will have the option to receive either a combination of cash and KMI common stock, all cash, or all KMI common stock for their units. The specific exchange ratios are outlined in the merger agreements, with a provision for proration to ensure the aggregate cash paid and shares issued align with the standard consideration.

How will KMI finance the cash portion of these acquisitions?

KMI has secured a commitment for a $5.0 billion senior unsecured 364-day term loan facility from Barclays Bank to finance the cash components of the KMP and EPB mergers.

Are there any conditions that must be met for these mergers to close?

Yes, the completion of these mergers is subject to several conditions, including approval from KMI's stockholders and the unitholders of KMP, KMR, and EPB. Other conditions include obtaining necessary regulatory approvals (like HSR Act clearance), the effectiveness of a registration statement on Form S-4, and approval for listing of KMI's common stock on the NYSE, among others.

KMI/EP-PC 8-K: Material Agreements

Summary

Kinder Morgan, Inc. (KMI) filed an 8-K on August 12, 2014, to announce a significant strategic move: the company entered into three separate merger agreements to acquire Kinder Morgan Energy Partners, L.P. (KMP), Kinder Morgan Management, LLC (KMR), and El Paso Pipeline Partners, L.P. (EPB). These transactions are designed to simplify KMI's complex corporate structure, creating a single, consolidated entity. The proposed mergers involve the exchange of KMP and EPB common units for a mix of KMI common stock and cash, or entirely cash or stock, subject to proration. KMR's shares will be converted into KMI common stock. The acquisitions are contingent on KMI stockholder and KMP, KMR, and EPB unitholder approvals, as well as regulatory clearances, with a target completion date of May 11, 2015. This consolidation is intended to streamline operations, enhance financial flexibility, and potentially reduce costs. KMI has secured a $5.0 billion commitment from Barclays Bank to finance the cash components of the KMP and EPB mergers. The filing also includes a Support Agreement from Richard D. Kinder and RDK Investments, Ltd. to vote their KMI shares in favor of the necessary corporate actions, demonstrating key stakeholder alignment. An updated investor presentation was also made available, further detailing these transformative transactions for the company and its unitholders.

Key Highlights

1KMI announced definitive agreements to acquire Kinder Morgan Energy Partners (KMP), Kinder Morgan Management (KMR), and El Paso Pipeline Partners (EPB).
2The transactions aim to simplify KMI's corporate structure into a single, consolidated entity.
3KMP and EPB unitholders will receive a mix of KMI stock and cash, or all cash/all stock, subject to proration.
4KMR shareholders will receive KMI common stock.
5KMI has secured a $5.0 billion bridge loan commitment from Barclays to fund the cash portion of the transactions.
6The completion of these mergers is subject to regulatory approvals, stockholder/unitholder approvals, and other customary closing conditions.
7A Support Agreement has been executed with Richard D. Kinder to vote his KMI shares in favor of the transactions.

KINDER MORGAN, INC. 8-K Report, Material Agreement (Aug 12, 2014)

Summary

Key Highlights

Frequently Asked Questions