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Enterprise to buy Teppco in $3.3B all-stock deal

Enterprise to buy Teppco in $3.3B all-stock deal

Enterprise Products will acquire Teppco Partners in an all-stock deal worth about $3.3 billion, forming a new energy company that will run 48,000 miles (77,000 kilometers) of crude and natural gas pipelines and control one of the liquid natural gas terminals in the U.S., the companies announced Monday.
Teppco, which had seen its stock value tumble along with the price of oil and natural gas, rejected an earlier bid for $2.8 billion earlier this year.
The Teppco deal brings to Enterprise an enormous transportation and storage network and will lead to $20 million in savings, the company said.
The acquisition "will establish Enterprise as the largest pipeline partnership as measured by miles of pipe, enterprise value and equity market capitalization," said Michael A. Creel, President and CEO of Enterprise.
Teppco shareholders will receive 1.24 Enterprise common shares for each Teppco share, a 14.5 percent premium to the initial offer made by Enterprise March 9.
Teppco Partners LP and its general partner Texas Eastern Products Pipeline Co. LLC, will become wholly owned subsidiaries of Enterprise. The new partnership will take the Enterprise name.
Teppco shares rose 2.5 percent, or 71 cents, to $29.40 in premarket trading. Enterprise shares fell 2 percent, or 54 cents, to $24.75.
The deal is expected to close by the end of the year.