Summary
Valero Energy Corporation (VLO) announced on October 18, 2018, that it has entered into a definitive merger agreement to acquire all of the outstanding common units of Valero Energy Partners LP (VLP) that it does not already own. The transaction is structured as a merger where VLP will survive as a Delaware limited partnership. VLO's indirect wholly owned subsidiary, Forest Merger Sub, LLC, will merge with and into VLP. This move aims to simplify VLO's corporate structure and potentially enhance financial flexibility. The terms of the agreement stipulate that unaffiliated unitholders of VLP will receive $42.25 in cash per common unit, without interest. The transaction has received unanimous approval from VLO's Special Committee and the Conflicts Committee of VLP's General Partner, with both committees determining the merger to be fair and in the best interest of VLP's unaffiliated unitholders. The acquisition is subject to customary closing conditions, including VLP unitholder approval, and is expected to close by July 18, 2019.
Key Highlights
- 1Valero Energy Corporation (VLO) to acquire all outstanding common units of Valero Energy Partners LP (VLP) it does not own.
- 2Unaffiliated VLP unitholders will receive $42.25 in cash per common unit.
- 3The transaction is structured as a merger where VLP will survive.
- 4Merger Agreement includes customary representations, warranties, and covenants, including a 'conduct business as usual' clause for VLP.
- 5VLP unitholders will receive a third-quarter 2018 cash distribution of at least $0.551 per common unit.
- 6The transaction requires approval from a majority of outstanding VLP common units.
- 7Both VLO's Special Committee and VLP's Conflicts Committee have unanimously approved the merger.