Kinder Morgan Buying El Paso for $21B
Interesting surprise when checking the financial news on a lazy Sunday afternoon. Kinder Morgan (KMI) agrees to buy El Paso (EP) for over $21B. The deal provided a 37% premium to the closing price on Friday. It also amounted to 20%+ above the 52 week high. Numerous interesting facts about this deal. First, this deal involves natural gas pipelines at a time that nat gas prices remains in the dumps. Second, KMI was willing to pay such a premium over the 52 week high when most investors have fled the markets. Third, KMI was recently re-joined the public markets in February after a nearly four year haiedus. The combination will form the largest natural gas pipeline network in North America. It also creates the fourth largest energy company in North America with an enterprise value of $94B. Even more importantly, the deal with be cash flow accretive from the beginning. The deal also provides approximate cost savings of $350M per year amounting to 5% of EBITDA. So again another reason...