Inergy L.P., the Kansas City-based gas pipeline operator, on Monday agreed to a merger valued at $7 billion with Crestwood Midstream Partners L.P., a Houston company.
The buyout, involving a series of cash-and-stock transactions, will result in Crestwood Holdings L.P., an affiliated company, taking over Inergy and a related company, Inergy Midstream L.P.
Crestwood Midstream is controlled by the private equity firm First Reserve, which currently owns all of Crestwood Holdings and about 43 percent of Crestwood Midstream.
Together, the combined company will provide pipeline and other services in some of the biggest oil and gas drilling areas in North America, including the Marcellus, Bakken and Eagleford shale formations.
The transaction, which requires shareholder and regulatory approvals, is expected to be completed in the third quarter this year, according to a statement released by both companies.
The name of the combined company will be determined closer to the completion of the buyout, the companies said. Once the transaction is completed, the headquaters will be in Houston, with executive offices in Kansas City and Fort Worth.
Robert G. Phillips, Crestwood’s chairman and chief executive, will head the newly merged company. John J. Sherman, Inergy’s chairman and chief executive, and R. Brooks Sherman Jr., president of Inergy, will stop down from day-to-day management, the announcement said. However, both will maintain their investments in the partnership.
“We view this transaction as a merger of equals through which we are creating a larger, more diversified operating platform that will be highly attractive to investors, customers, creditors and employees,” Phillips said.