Brookfield Infrastructure Partners, the infrastructure company of New York’s Brookfield Asset Management, and its institutional partners announced on April 3 that it had entered an agreement to acquire 100 percent ownership of Colonial Enterprises and its midstream asset portfolio for $9 billion.
Under the agreement, Brookfield is acquiring the ownership interest in the portfolio from five partners who each own different percentages of the company, including Shell Midstream Operating (16.125 percent), Koch Capital Investments Company (28.088 percent), KKR-Keats Pipeline Investors (23.443 percent), Caisse de dépôt et placement du Québec (16.549 percent) and IFM Investors (15.795 percent). In a separate release, Shell reported that it would be receiving $1.45 billion for its ownership stake in the portfolio.
Brookfield will also contribute a $500 million equity investment to the acquisition, representing 15 percent of its total equity investment. It will use the funds it received through its recently announced strategic capital recycling initiatives to fund this investment.
The transaction is expected to close in Q4 of 2025.
Kirkland & Ellis is serving as Brookfield Infrastructure Partners’ outside legal counsel in the deal with a Texas-based team that includes Kim Hicks (Austin/Houston), Brittany Sakowitz (Houston/Austin), Roald Nashi (Houston/Washington, D.C.) and Chad Smith (Houston). East Coast-based Kirkland lawyers Jacqueline Trudeau (New York) and Andrew DeVore (Washington, D.C.) also contributed to the deal.
Simpson Thacher & Bartlett is representing KKR in the deal with a team that includes Shamus Crosby (Houston), Ana Sanchez (Houston), Andrew Kingsbury (Houston), Arthur Kopilevich (Houston), Nancy Mehlman (New York), Lina Pan (Palo Alto), David Rubinsky (New York), Pasco Struhs (New York), Krista McManus (New York), Lori Lesser(New York), Christina Breitbeil (New York), Toby Chun (Washington, D.C.) and Noreen Lavan (New York).
Milbank represented Colonial Enterprises in the deal with a team led by John Franchini (New York) and Aaron Stine (New York) and also included Rachel Rice (New York), Joysheel Shrivastava (New York), Jenna McGrath(Washington, D.C), Carlos Clemente (Washington, D.C.), Jake Maguire (Washington, D.C.), Adam Di Vincenzo (Washington, D.C.), Alexis Brown-Reilly (Washington, D.C.), Alix Hudon (New York), John Beahn (Washington, D.C.), Cara Cavanaugh (Washington, D.C.), Clayton Melton (Washington, D.C), Kelly Bartley (New York), Joo Hyeon Lee (New York), Matthew Ahrens (New York), Allison Sloto (New York), John Garces (New York), Antonio Diaz-Albertini(New York), Jackie Karol (New York) and Sarah Brooks (New York).
The financial institutions that provided the debt financing for the deal include Morgan Stanley Senior Funding and Mizuho Bank. Morgan Stanley Senior Funding also serves as the book-runner for Brookfield’s term loan facility. Jefferies, Greenhill & Co. and Morgan Stanley jointly serve as Brookfield Infrastructure Partners’ financial advisors on the transaction.
The newly acquired portfolio, which includes the Colonial Pipeline, comprises one of the largest refined product systems in the U.S., spanning 5,500 miles between Texas and New York, and primarily serves customers along the U.S.’s East Coast.
Though the Colonial Pipeline has been in operation since 1964, it may be best known for a May 2021 ransomeware attack, which caused interruptions of fuel delivery primarily on the East Coast. A $4.4 million ransom was paid and deliveries were restored, but only after considerable delay. The FBI later announced later that it had recovered much of the bitcoin paid for the ransom.