Energy Transfer Partners LP (ETP), a pipeline operator, has agreed to sell its stake in Sunoco LLC to Sunoco LP (SUN) for $2.23 billion. The company held a 68.42% interest in Sunoco.
The deal will complete Sunoco’s transition into a wholesale fuel and retail marketing company. As part of the deal, Sunoco will pay Energy Transfer Partners $2.2 billion in cash. The remainder will be issued through 5.6 million units of common stock.
The companies are master-limited partnerships created by Energy Transfer Equity LP. After the deal, Energy Transfer Partners will still be the largest unit holder in Sunoco LP, holding a 46% stake in the company.
Sunoco LP will raise cash for the deal by selling shares and obtaining a bank loan worth $2.035 billion. The company does not expect that it will need to raise additional equity financing next year.
In July, Energy Transfer Partners sold off Susser Holdings to Sunoco LP in a $1.94 billion cash and stock deal. Previously, the company also transferred some of its convenience store assets to Sunoco in a $768 million deal.
Sunoco LLC distributes gasoline to around 4,100 retail fuel consumers and 860 Sunoco stations across the country.
Sunoco has also announced a private placement worth $750 million with Energy Transfer equity and private investors.