DCP Midstream Partners LP (DPM) said Jan. 4 it acquired the assets DCP Midstream LLC—a joint venture between Phillips 66 (NYSE: PSX) and Spectra Energy Corp. (NYSE: SE)—to create the largest NGL producer and gas processor in the U.S.
As part of the deal, DCP Midstream will pay DCP $424 million cash in exchange for 31.1 million DPM units. DPM will also assume $3.15 billion of DCP Midstream's debt.
The combined company, which has an enterprise value of $11 billion, will be renamed DCP Midstream LP and will trade with the ticker symbol "DCP" on the New York Stock Exchange.
The deal will simplify the company's corporate structure, Wouter van Kempen, CEO of DCP Midstream and DPM, said in a statement.
DPM is managed by its general partner, DCP Midstream GP LP, which in turn is managed by an entity owned by DCP Midstream LLC.
DPM said Jan. 4 it would build a new 200 million cubic feet per day (MMcf/d) processing plant to increase its capacity in Colorado's Denver-Julesburg Basin by 50%. The plant is expected to come online in late 2018.
The company would also expand its NGL capacity on Sand Hills pipeline by 30% to 365,000 barrels per day. The pipeline moves NGL from the Permian Basin and Eagle Ford Shale to Mont Belvieu, Texas.
BofA Merrill Lynch was financial adviser to DCP Midstream, while Evercore was financial adviser to DPM for the deal.
Bracewell was legal counsel to DCP Midstream, while Andrews Kurth Kenyon and Richards, Layton & Finger was legal counsel to the conflicts committee of DPM's board.
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