Energy Transfer Equity acquiring Regency Energy Partners GP

Regency Energy Partners LP (Nasdaq: RGNC) announced on May 11 that Energy Transfer Equity, L.P. (NYSE: ETE) will acquire the general partner interest in Regency Energy Partners LP from an affiliate of GE Energy Financial Services, a unit of GE. In addition, Regency will acquire a 49.9 percent ownership interest in the Midcontinent Express Pipeline from Energy Transfer Equity, L.P.
ETE will acquire a 100 percent interest in Regency's general partner from an affiliate of GE Energy Financial Services for ETE preferred units with a value of approximately $300 million. Affiliates of GE Energy Financial Services will retain their 24.7 million limited partner units and will be Regency's second largest unitholder, holding 21 percent of Regency's common units after giving effect to the transaction.
In addition, GE Energy Financial Services will have the right to name two board members to the Regency board of directors and one board member to the ETE board of directors.
ETE will own the general partner of both Energy Transfer Partners, L.P. (NYSE: ETP) and Regency. Regency and Energy Transfer Partners (ETP) will operate as separate entities, both with publicly traded limited partner units.
"Energy Transfer Equity is an experienced midstream leader with a strong track record of supporting its limited partnership, assisting ETP in obtaining investment grade status and growing its distributable cash flow," said Byron Kelley, chairman, president and chief executive officer of Regency. "Once the transaction closes, we look forward to calling upon ETE's expertise and extensive knowledge while continuing to focus on implementing the strategic growth objectives we have set for Regency."
Regency also announced on May 11 that it has entered into a definitive agreement to purchase a 49.9 percent interest in the Midcontinent Express Pipeline from ETE. Regency will fund the transaction through the issuance of approximately 26.27 million Regency limited partner units to ETE. ETE will hold 22 percent of Regency's common units after giving effect to the transaction.