ETE-ETP: A Not So Simple Simplification

You would think a merger between two affiliated entities would be easy to pull off. Not so with Energy Transfer Equity’s purchase of Energy Transfer Partners, which has been selected as a finalist for the 2018 M&A Deal of the Year award by the Dallas/Fort Worth chapter of the Association of Corporate Counsel.

For one thing, the deal was massive: It involved $27 billion in stock and $35 billion in debt assumption to create a $90 billion energy infrastructure giant. It had incentive distribution rights that had to be dealt with and had to clear conflicts committees from each entity. The timing also had to be right or else the deal might negatively affect the combination’s credit rating.