MarkWest Energy to be acquired in $15.8B natural gas deal

The deal reflects a 32% premium of Friday’s closing price of MarkWest shares.

After the deal, MarkWest would become a wholly owned subsidiary of MPLX. The benefits of such a merger are in the evolution of a platform which hosts the combined partnership to “grow distributable cash flow” as well as helps in bringing ‘significant long-term value for the unitholders, ‘ he added. Valued at $21 billion this Master Limited Partnership (MLP) is expected to post ‘25% compound annual distribution growth rate, ‘ by the year 2017. Its market cap its less than $5 billion (and heading even lower as its units are down more than 16% on the deal announcement) while Markwest Energy Partners’ market cap implied in that deal is $15.8 billion. The proposed deal would combine the largest processor of gas in the Marcellus and Utica share regions of Pennsylvania and Ohio with a growing oil and refined products partnership.

MarkWest’s shares were trading at $71.29 before the bell, below the offer price of $78.64.

“This combination creates a unique new competitor in the midstream sector”, Marathon Chairman and CEO Gary Heminger said in the statement. Heminger is the top executive of MPLX and Marathon Petroleum Corp.

MarkWest, post the transaction, will be part of MPLX, with its headquarters at Denver, Colorado, and will have Semple as the Vice Chairman of MPLX LP (NYSE:MPLX).

Edwards Lifesciences Corp said it would buy privately held heart device maker CardiAQ Valve Technologies Inc for up to $400 million to expand its portfolio of less-invasive mitral valve replacement devices. Upon completion of the transaction, MPC would continue to own the general partner of MPLX and approximately 19 percent of MPLX’s common units.

That said, MPLX is also stepping up with an ambitious deal to acquire a company that has a really robust growth profile in the Marcellus and Utica shale plays.