Sunoco to Acquire NuStar Energy for $7.3 Billion
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Sunoco LP and NuStar Energy have entered into a definitive agreement where 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 percent 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 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.
STRATEGIC RATIONALE
• Increases Stability: Diversifies business, adds scale, and captures benefits of vertical integration by combining
two stable businesses
• Strengthens Financial Foundation: Continues Sunoco’s successful capital allocation strategy on a larger
scale, improving the partnership’s credit profile, and supporting a growing distribution
• Enhances Growth: More cash flow generation for reinvestment and growth across an expanded opportunity
set
Sunoco LP is a master limited partnership with core operations that include the distribution of motor fuel to approximately 10,000 convenience stores, independent dealers, commercial customers, and distributors located in more than 40 U.S. states and territories as well as refined product transportation and terminaling assets. Sunoco’s general partner is owned by Energy Transfer.
NuStar Energy is an independent liquids terminal and pipeline operator. NuStar currently has approximately 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids. The partnership’s combined system has approximately 49 million barrels of storage capacity, and NuStar has operations in the United States and Mexico.
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