Regency Energy Partners LP (RGP:US), a natural gas and liquids processing and transportation company, agreed to acquire Southern Union Gathering Co. for $1.5 billion in cash and stock to expand in the Permian Basin of Texas.
The deal, expected to be completed in the second quarter, includes the purchase of a 5,600-mile gathering system and gas and liquids processing and treating facilities in Texas and New Mexico, the Dallas-based company said in a statement.
“This acquisition represents a significant growth opportunity for Regency and is very strategic to our plans for expansion in the Permian Basin,” Chief Executive Officer Mike Bradley said in the statement.
Regency will issue $900 million of new shares to Southern Union, while the remaining $600 million will be paid in cash funded from long-term borrowings, the company said. Southern Union Gathering is a unit of Southern Union Co.
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