2010-10-14-2010-10-12-2010-10-12

Acquired 23.44% stake in Colonial Pipeline Co., gaining 5,500 mile pipeline system running from Gulf Coast to U.S. Eastern seaboard.

Kohlberg Kravis Roberts Co. LP (KKR) and South Korea-based public pension fund National Pension Service of Korea have acquired a 23.44% stake in Atlanta-based Colonial Pipeline Co. from Chevron Pipe Line Co., a subsidiary of Chevron Corp., San Ramon, Calif., (NYSE: CVX).

Although the deal value was undisclosed, the Korea Economic Daily valued the acquisition at approximately $890 million.

The Colonial pipeline system is the largest refined products pipeline in North America, running from supply centers in the Gulf Coast to customers along the U.S. Eastern seaboard. Operations include a 5,500-mile petroleum products pipeline system which delivers 100 million gallons of gasoline, kerosene, diesel fuel, home-heating oil and aviation fuels per day. Other shareholders include Koch Industries Inc. (28.09%), ConocoPhillips (16.55%), Royal Dutch Shell (16.12%) and IFM (US) Colonial Pipeline 2 LLC (15.8%).

KKR energy and infrastructure global head Marc Lipschultz says, "Colonial plays an important role in supplying the eastern U.S. markets with a variety of fuels. The pipeline is an attractive infrastructure asset with a history of stable earnings and a high quality customer base. It also has the benefit of having an experienced management team with a stellar operational track record."

KKR co-founder Henry Kravis says, "NPS is a sophisticated pension fund manager that has been expanding its global capabilities under CEO Jun's outstanding leadership. We are excited to embark upon this new partnership and look forward to working together on other investments in the future."

NPS chairman and CEO Jun Kwang-woo says, "We are undertaking this investment with KKR because it fits well with our efforts to both diversify our investments around the world and to seek long-term, stable returns to match the long-term needs of our beneficiaries."

KKR Asia managing partner Joseph Bae says, "This transaction is a testimony to KKR's global platform, our energy and infrastructure expertise, and close relationships with key investors. We are excited to be able to partner with NPS, an important strategic Asian investor in our funds, to make the investment."

The deal closed Oct. 8.