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Energy Transfer Affiliate to Contribute Southern Union Gas Services to Regency Energy Partners for $1.5 Billion

  Energy Transfer Affiliate to Contribute Southern Union Gas Services to
  Regency Energy Partners for $1.5 Billion

Business Wire

DALLAS -- February 27, 2013

Energy Transfer Partners, L.P. (NYSE:ETP) and Energy Transfer Equity, L.P.
(NYSE:ETE)  announced today that their affiliate, Southern Union Company
(Southern Union), has agreed to contribute Southern Union Gathering Company,
LLC, the owner of Southern Union Gas Services, Ltd. (SUGS), to Regency Energy
Partners LP (NYSE: RGP) in exchange for $1.5 billion. The transaction will
include a 5,600-mile gathering system in West Texas and New Mexico and
approximately 500 million cubic feet per day of processing and treating
facilities. The deal is expected to close in the second quarter of 2013,
subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and
other customary closing conditions.

In exchange for the assets, Southern Union will receive $750 million of newly
issued Regency common units, $150 million of new Class F units, and $600
million in cash. ETE, which owns the general partner and incentive
distribution rights (IDR) of Regency, has agreed to forego all IDR payments
from Regency on the newly issued Regency units for the first eight consecutive
quarters following the closing. The Class F units will not receive any cash
distributions for eight consecutive quarters following the closing and
thereafter will convert to Regency common units, receiving distributions at
the prevailing rate. In addition, ETP has agreed to forego the $10 million
annual management fee paid by Regency for the same time period
post-transaction close.

Following discussions with the credit rating agencies, ETP and ETE have
received feedback that the transaction will have no effect on existing credit
ratings at any of the entities. Additionally, the cash proceeds from the sale
of SUGS will be utilized to repay debt, including borrowings outstanding under
Southern Union’s revolving credit facility.

The agreement between Southern Union and Regency is another important step in
executing on ETE’s and ETP’s commitment to simplify their structures and
optimize their asset portfolios. The announcement of the deal with Regency
follows the December announcement by ETE and ETP that Southern Union’s local
distribution companies, Missouri Gas Energy and New England Gas Company, would
be sold.

Credit Suisse Securities (USA) LLC acted as sole financial advisor to ETP
Holdco Corporation, a subsidiary of ETP and ETE and the parent of Southern
Union Company.

Energy Transfer Partners, L.P. (NYSE:ETP) is a master limited partnership
owning and operating one of the largest and most diversified portfolios of
energy assets in the United States. ETP currently has natural gas operations
that include approximately 24,000 miles of gathering and transportation
pipelines, treating and processing assets, and storage facilities. ETP also
owns general partner interests, 100% of the incentive distribution rights, and
a 32.4% limited partnership interest in Sunoco Logistics Partners L.P.
(NYSE:SXL), which operates a geographically diverse portfolio of crude oil and
refined products pipelines, terminalling and crude oil acquisition and
marketing assets. ETP also holds a 70% interest in Lone Star NGL, a joint
venture that owns and operates natural gas liquids storage, fractionation and
transportation assets in Texas, Louisiana and Mississippi. In addition, ETP
holds controlling interest in a corporation (ETP Holdco Corporation) that owns
Southern Union Company and Sunoco, Inc. ETP’s general partner is owned by ETE.
For more information, visit the Energy Transfer Partners, L.P. website at
www.energytransfer.com.

Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited partnership, which
owns the general partner and 100% of the incentive distribution rights (IDRs)
of Energy Transfer Partners, L.P. (NYSE:ETP) and approximately 50.2 million
ETP limited partner units; and owns the general partner and 100% of the IDRs
of Regency Energy Partners LP (NYSE:RGP) and approximately 26.3 million RGP
limited partner units. ETE also owns a non-controlling interest in a
corporation (ETP Holdco Corporation) that owns Southern Union Company and
Sunoco, Inc. The ETE family of companies owns approximately 69,000 miles of
natural gas, natural gas liquids, refined products, and crude pipelines. For
more information, visit the Energy Transfer Equity, L.P. web site at
www.energytransfer.com.

Forward-Looking Statements

This press release may include certain statements concerning expectations for
the future that are forward-looking statements as defined by federal law. Such
forward-looking statements are subject to a variety of known and unknown
risks, uncertainties, and other factors that are difficult to predict and many
of which are beyond management’s control. An extensive list of factors that
can affect future results are discussed in the Partnerships’ Annual Reports on
Form 10-K and other documents filed from time to time with the Securities and
Exchange Commission. The Partnerships undertake no obligation to update or
revise any forward-looking statement to reflect new information or events.

The information contained in this press release is available on our website at
www.energytransfer.com.

Contact:

Investor Relations:
Energy Transfer
Brent Ratliff, 214-981-0700
or
Media Relations:
Granado Communications Group
Vicki Granado, 214-599-8785
Cell: 214-498-9272
 
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