Sunoco To Acquire NuStar Energy In $7.3 Bln All-equity Deal

(RTTNews) - Sunoco LP (SUN) and NuStar Energy L.P. (NS) announced Monday that the parties have entered into a definitive agreement whereby Sunoco will acquire NuStar in an all-equity transaction valued at approximately $7.3 billion, including assumed debt.

Under the terms of the agreement, NuStar common unitholders will receive 0.400 Sunoco common units for each NuStar common unit, implying a 24% premium based on the 30-day VWAP's of both NuStar and Sunoco as of January 19, 2024.

Sunoco has secured a $1.6 billion 364-day bridge term loan to refinance NuStar's Series A, B and C Preferred Units, Subordinated Notes, Revolving Credit Facility, and Receivables Financing Agreement.

The transaction is expected to be immediately accretive with more than 10% accretion to distributable cash flow per LP unit by the third year following close. It will also generate at least $150 million of run-rate synergies by the third year following close.

The transaction has been unanimously approved by the board of directors of both companies and is expected to close in the second quarter of 2024 upon the satisfaction of closing conditions, including approval by NuStar's unitholders and customary regulatory approvals.

Prior to closing, NuStar will make a cash distribution of $0.212 per common unit to its common unitholders.