Sunoco Buys NuStar: $7.3B Deal
- Sunoco, a major motor fuels distributor, has announced it will acquire NuStar Energy, a liquids terminal and pipeline operator, for approximately $7.3 billion, including debt.
- Under the agreement, NuStar shareholders will receive 0.4 shares of Sunoco stock for each NuStar share they own.
- To facilitate the acquisition and refinance existing debt, Sunoco has secured a $1.6 billion bridge term loan.
Sunoco is set to acquire NuStar Energy in a notable $7.3 billion deal, an all-stock transaction poised to reshape the energy landscape.This strategic move will expand Sunoco’s reach,offering NuStar shareholders 0.4 shares of Sunoco stock for each NuStar share, a deal valuing NuStar shares at about $23.78 each. This represents a significant premium over NuStar’s closing price prior to the declaration! News Directory 3 reports that the acquisition, backed by a $1.6 billion bridge loan, is expected to increase Sunoco’s distributable cash flow by over 10% within three years. The boards of directors for both companies have already approved the transaction. Discover what’s next as we look forward to the finalization of the acquisition,slated for the second quarter of 2024,and how they will integrate operations and achieve projected synergies.
Sunoco to Acquire NuStar Energy for $7.3 Billion
Sunoco, a major motor fuels distributor, has announced it will acquire NuStar Energy, a liquids terminal and pipeline operator, for approximately $7.3 billion, including debt. The deal, structured as an all-stock transaction, aims to expand SunocoS reach in the energy sector.
Under the agreement, NuStar shareholders will receive 0.4 shares of Sunoco stock for each NuStar share they own. This equates to about $23.78 per share based on the previous Friday’s closing price,representing a nearly 32% premium over NuStar’s closing price of $18.03.
To facilitate the acquisition and refinance existing debt, Sunoco has secured a $1.6 billion bridge term loan. This loan will address NuStar’s preferred shares, subordinated notes, revolving credit facility, and receivables financing agreement.
Sunoco anticipates the acquisition will boost its distributable cash flow per LP share by more than 10% within three years of closing. The company also projects at least $150 million in run-rate synergies within the same timeframe.
Both companies’ boards of directors have unanimously approved the transaction, which is expected to be finalized in the second quarter of 2024.
What’s next
Following the expected closing in the second quarter of 2024, the combined entity will focus on integrating operations and achieving the projected synergies to enhance shareholder value and strengthen its position in the motor fuels distribution and liquids terminal market.