8-KAcquisitions & DispositionsMaterial AgreementsFinancial Events+1

MPLX LP 8-K Report, Material Agreement (Mar 4, 2014)

Filed March 4, 2014For Securities:MPLXMPLXP

Summary

This 8-K filing from MPLX LP reports on the acquisition of an additional 13.0% interest in MPLX Pipe Line Holdings LP (Pipe Line Holdings) from MPL Investment LLC, a subsidiary of Marathon Petroleum Corporation (MPC), for $310.0 million. This transaction increases MPLX Operations' ownership in Pipe Line Holdings to 69.0%. The acquisition was financed through a combination of cash on hand and borrowings under MPLX's revolving credit facility. The transaction was approved by the Conflicts Committee of MPLX GP LLC, comprising independent directors who retained independent counsel.

Key Highlights

  • 1MPLX LP acquired an additional 13.0% interest in MPLX Pipe Line Holdings LP for $310.0 million.
  • 2This acquisition increases MPLX Operations' total ownership in Pipe Line Holdings to 69.0%.
  • 3The transaction was effective March 1, 2014.
  • 4Financing for the acquisition included $40.0 million in cash and a $270.0 million borrowing on its revolving credit facility.
  • 5The deal was approved by the independent Conflicts Committee of MPLX GP LLC.
  • 6Both the seller (MPL Investment LLC) and MPLX GP LLC are indirect wholly-owned subsidiaries of Marathon Petroleum Corporation (MPC).
  • 7MPC holds a significant majority (71.6%) limited partnership interest in MPLX LP.

Frequently Asked Questions

The main purpose was to report the entry into a material definitive agreement and the completion of an acquisition, specifically MPLX Operations LLC acquiring an additional 13.0% interest in MPLX Pipe Line Holdings LP from an MPC subsidiary.

The acquisition was financed using $40.0 million of cash on hand and a $270.0 million borrowing under MPLX's $500.0 million revolving credit facility.

The approval by the Conflicts Committee, composed of independent directors and advised by independent counsel, is important as it indicates that the transaction was reviewed and deemed fair from the perspective of parties other than MPC, addressing potential conflicts of interest given MPC's relationship with MPLX.

MPLX LP is the registrant. MPLX Operations LLC is a subsidiary of MPLX. MPLX Pipe Line Holdings LP is an entity in which MPLX Operations is increasing its ownership. MPL Investment LLC, the seller of the additional interest, and MPLX GP LLC (MPLX's general partner) are both indirect wholly-owned subsidiaries of Marathon Petroleum Corporation (MPC). MPC also holds a significant stake in MPLX LP.