In a major shake-up of the energy sector, Sunoco LP announced its agreement to purchase San Antonio-based pipeline operator NuStar Energy LP in a $7.3 billion deal. This strategic move was revealed earlier today, as the Dallas-based gas station giant aims to diversify its foothold in the industry. Analysts were briefed on the development, which is poised to significantly bolster Sunoco's network for crude oil transportation and storage, leveraging NuStar's sizable infrastructure in the Midwest and West Coast, the San Antonio Express-News reported.
Sunoco's CEO, Joseph Kim, emphasized the synergy of the two entities in a statement obtained by the publication. "As we bring together two strong and stable companies, we would not be here today if not for the many talented and hardworking employees of both Sunoco and NuStar,” he said. “We look forward to working with the NuStar team to take the combined company to new levels of success." Following the announcement, NuStar shares surged by almost 18%, while Sunoco experienced over a 5% dip, as reported by San Antonio Express.
NuStar unitholders are set to benefit from the transaction, with the exchange granting them 0.4 Sunoco common units per NuStar unit. This exchange rate is approximately $23.78 based on the prior Friday's closing prices – a nearly 32% premium to NuStar's closing price of $18.03. To facilitate the acquisition, Sunoco has secured a $1.6 billion bridge loan for refinancing purposes against NuStar's financial obligations.
Notably, the acquisition follows a recent divestment by Sunoco of 204 convenience stores spread across Texas, Oklahoma, and New Mexico to 7-Eleven for $1 billion. Additionally, the company expanded its European footprint through an undisclosed agreement to purchase liquid terminals from Zenith Energy, as noted in an article from the same source. Despite Sunoco's stock slight downturn, the company executives are confident that a the NuStar deal will not trigger major anti-trust concerns.
