Regency Energy Partners LP (NYSE: RGP) has closed on its previously announced acquisition of the midstream business of Eagle Rock Energy Partners, L.P. (NASDAQ: EROC) for a combination of cash, Regency common units and assumption of indebtedness.

Regency issued approximately 8.2 million Regency common units to Eagle Rock and assumed approximately $500 million of outstanding Eagle Rock senior notes and exchanged those notes into Regency senior notes.

Regency will fund the cash consideration with proceeds from a $400 million private placement of Regency common units to a subsidiary of Energy Transfer Equity, L.P. (NYSE: ETE), the owner of Regency’s general partner, and borrowings under Regency’s revolving credit facility.

Eagle Rock’s midstream assets include approximately 8,100 miles of gathering pipeline and more than 800 million cubic feet per day (MMcf/d) of processing plants and their cash flows are supported by large, long-term acreage dedications. The combined system is expected to provide significant synergies, increase efficiencies on Regency’s current system, and enhance services for its customers.