Enterprise Products Partners LP and Oiltanking Partners, LP entered into a merger agreement. Under the terms of the merger agreement, Oiltanking Partners would merge with a subsidiary of Enterprise in a unit-for-unit exchange. Unitholders of Oiltanking Partners (other than Enterprise and its subsidiaries) would receive 1.3 Enterprise common units for each Oiltanking Partners common unit.
This exchange ratio represents a 5.6% premium to Oiltanking Partners unitholders based on the respective closing prices for Enterprise and Oiltanking Partners common units on Sept. 30, 2014, the day before the merger was originally proposed. Relative to the respective closing prices for Enterprise and Oiltanking Partners common units on Nov. 10, 2014, the day before the parties entered into the merger agreement, the 1.3 exchange ratio represents a 10.4% premium to Oiltanking Partners unitholders. Based on the latest cash distribution declared by Enterprise and Oiltanking Partners with respect to the third quarter of 2014, this exchange ratio would result in a 74% increase in cash distributions for Oiltanking Partners unitholders.
Upon completion of the merger, which is expected to occur in early 2015, the total consideration paid by Enterprise for the Oiltanking Partners general partner and related incentive distribution rights and the limited partner units would be approximately $6 billion.
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