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Shell USA to acquire Shell Midstream Partners for USD1.9B

Shell USA to acquire Shell Midstream Partners for USD1.9B
Photo courtesy of Shell Midstream Partners

In February 2022, Shell announced plans to purchase all the remaining common units held by the public in U.S.-based Shell Midstream Partners, L.P. in order to streamline the governance of its assets, reduce costs, and gain the flexibility to optimise the company’s U.S. pipeline portfolio.

This week, the company announced that Shell USA, Inc., a fully-owned subsidiary of Shell, and Shell Midstream Partners have executed a definitive agreement and merger plan valued at USD1.96 billion. Shell USA will acquire all of the common units representing limited partner interests in Shell Midstream Partners held by the public at USD15.85 per Public Common Unit in cash.

The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions. 

Shell Midstream Partners’ assets include interests in entities that own crude oil and refined products pipelines and terminals that serve as key infrastructure to transport onshore and offshore crude oil production to U.S. Gulf Coast and Midwest refining markets and deliver refined products from those markets to major demand centers, as well as storage tanks and financing receivables that are secured by pipelines, storage tanks, docks, truck and rail racks and other infrastructure used to stage and transport intermediate and finished products. Its assets also include interests in entities that own natural gas and refinery gas pipelines that transport offshore natural gas to market hubs and deliver refinery gas from refineries and plants to chemical sites along the U.S. Gulf Coast.

A subsidiary of Shell USA, the majority shareholder of the outstanding common units of Shell Midstream Partners has approved the transaction, so approval of the transaction by any other stakeholder is not being solicited.

Currently, a subsidiary of Shell USA owns 269,457,304 shares of Shell Midstream Partners, which represents a stake of 68.5%.