The unitholders of natural gas processor and distributor MarkWest Energy Partners LP MWE has given approval to its merger with MPLX LP MPLX – a partnership controlled by independent oil refiner and marketer Marathon Petroleum Corporation MPC.
It is to be noted that 80% of the MarkWest Energy unitholders favored the merger although two founding members were against the agreement.
In July, MPLX announced that it would acquire natural gas processor and distributor MarkWest Energy. Following the closure of the deal, expected by Dec 4, MarkWest Energy will become a wholly owned subsidiary of MPLX. The merger would create the fourth-largest master limited partnership (“MLP”) in terms of market capitalization. The combined entity will thereby form a large-cap, diversified MLP with a strong growth profile.
The deal – valued at $15.8 billion in July – included MarkWest Energy’s $4.2 billion debt assumption. But by the middle of November, the deal value plunged to $10 billion owing to the slipping prices of the energy stock. Consequently, Marathon Petroleum agreed to improve the cash portion of the agreement to $6.20 per unit from $5.21 – implying that MarkWest Energy unitholders would receive about $6.20 in cash for each unit they hold. The company further added that this is the best and the final offer for MarkWest Energy unitholders.
Currently, both Marathon Petroleum and MarkWest Energy carry a Zacks Rank #3 (Hold), while MPLX has a Zacks Rank #5 (Strong Sell).
A better-ranked stock in the energy sector is Energy Transfer Equity LP ETE, sporting a Zacks Rank #1 (Strong Buy).
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