Southern Union Shareholders Approve Energy Transfer's Deal

Written By Brianna Panzica

Posted December 9, 2011

Williams Cos (NYSE: WMB) and Energy Transfer (NYSE: ETE) had been bidding back and forth to attain Southern Union (NYSE: SUG) since early this summer.

But finally the bidding came to an end, and Southern Union shareholders approved Energy Transfer’s offer.

According to Bloomberg, Energy Transfer offered a deal worth $5.3 billion in shares for the takeover, in which Southern Union shareholders will have the option of receiving $44.25 in cash or a share of Energy Transfer.

Up to 60% of the deal will be conducted with cash, and between 40% and 50% will be units of Energy Transfer.

Overall the deal totals about $9.4 billion, which includes debt.

Roughly 98% of Southern Union shareholders approved the deal, Bloomberg says.

It is expected to close in the beginning of 2012, and Southern Union is happy about it. As CEO George L. Lindemann told the Wall Street Journal:

“The transaction creates compelling opportunities for both Southern Union and Energy Transfer.  It is the right next step for Southern Union and delivers significant value for our shareholders.”

Southern Union owns natural gas pipelines across the United States.  The majority of its 15,000 miles of pipeline connects natural gas supplies in Texas and Oklahoma to refiners in Florida and the Midwest, Bloomberg reports.

Pipeline operator Energy Transfer was interested in acquiring these large pipeline systems, especially in a time when natural gas popularity is booming.

Williams Cos., another American pipeline operator, had interest in the same thing and came close to getting it in this past summer’s bid battles.

The deal closed in mid July and was just approved by Southern Union shareholders on Friday.

Southern Union was up 1.18% on Friday to $42.13.  Energy Transfer jumped 2.04% to $38.56.

That’s all for now,


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