Enterprise Buys Teppco for $3.3 Billion

Two massive Houston-based energy corporations will become one when Enterprise Products Partners LP completes its acquisition of Teppco Partners LP for the sum of $3.3 billion. These two pipeline operators, both owned by billionaire Dan Duncan, will form the largest energy partnership in the United States.
 
The move has proven to be mutually beneficial. Teppco owners will receive 1.24 units of Enterprise stock for their Teppco units, which comes out to 9.3 percent more value than Teppco stocks alone. Enterprise will see earnings rise by next year and will be able to save about $20 million in costs.
 
All together, the conglomerated company will own about 48,000 miles worth of pipelines and control the most natural gas, liquid gas, and crude oil of any energy company in the United States. Analysts have attested to the profitability of the merger, crediting Dan Duncan with a move that will be overwhelmingly beneficial by cutting costs and increasing efficiency by a large margin.

Oil Pipeline (Image: Flickr)