Under the terms of the deal, Crestwood Midstream will merge with Crestwood Equity’s newly formed subsidiary.
Shareholders will receive 2.75 units of Crestwood Equity for each unit they own in Crestwood Midstream. The deal represents a 17% premium to Crestwood Midstream’s closing price on 5 May.
Crestwood Equity and Crestwood Midstream boards of directors have unanimously approved the proposed merger.
Subject to customary closing conditions, the transaction is expected to be concluded in the third quarter this year.
With this merger, Crestwood intends to simplify its corporate structure, which to streamline its strategy and operating footprint.
Upon completion of the merger transaction, Crestwood Midstream will be ceased from the publicly traded partnership and operate as a wholly-owned subsidiary of Crestwood Equity.
Crestwood chairman, president and CEO Robert Phillips said: "By combining our partnerships and simplifying our corporate structure, we are better able to execute on our strategic objectives of fundamental value creation through providing first-class customer service and by executing on organic expansion and acquisition opportunities around our portfolio of midstream assets.
"The permanent elimination of our incentive distribution rights immediately improves our future cost of capital and better positions Crestwood to capture our share of the opportunities in front of us."
Crestwood Midstream owns and operates midstream businesses across the US, and is gathering, processing, treating, compression, storage and transportation of natural gas, NGLs and crude oil.
Image: Crestwood Equity to merge with Crestwood Midstream aimed to simplify corporate structure. Photo: courtesy of adamr / FreeDigitalPhotos.net.
