Pipeline firms hook up
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October 20, 1997: 9:42 a.m. ET
Kinder Morgan acquiring Santa Fe Pacific Pipeline assets for $1 billion
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NEW YORK (CNNfn) - Two energy pipeline companies, Kinder Morgan Energy Partners and Santa Fe Pacific Pipeline Partners, announced plans Monday to hook up in a deal worth $1 billion.
Santa Fe shareholders will get 1.39 shares of Kinder Morgan for each of their own shares, a premium of about 28 percent over Santa Fe's recent stock price.
Kinder Morgan will acquire all the assets of Santa Fe through the stock swap and will pay $85 million for Santa Fe's general partner interests.
In addition, Kinder Morgan said it will invest approximately $20 million in Santa Fe Pacific.
Kinder Morgan has been looking to expand into the Western United States and Santa Fe's 3,300 miles of pipeline in six states in that region will help with that effort, Kinder Morgan said.
The companies also said they expect the elimination of duplicate functions and consolidation of others to improve operations.
Kinder Morgan is valued at more than $650 million and operates two natural gas pipeline systems, a carbon dioxide pipeline, and two rail-to-barge coal transfer facilities.
The merger still requires shareholder and regulatory approval, a process the companies expect to complete by the first quarter of 1998.
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Kinder Morgan
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