Kinder Morgan to acquire El Paso for $38bn

Kinder Morgan (KMI) has entered a definitive agreement to acquire all of the outstanding shares of El Paso, including the assumption of debt outstanding at El Paso and El Paso Pipeline Partners (EPB) for $38bn.

The combined entity will represent the largest natural gas pipeline network, independent transporter of petroleum products and independent terminal owner / operator in the US.

On completion of the transaction, which will close in the second quarter of 2012, El Paso will become a subsidiary of KMI.

KMI intends to sell the exploration and production assets of EL Paso and all its natural gas pipeline assets to Kinder Morgan Energy Partner and EPB.

Kinder Morgan chairman and CEO Richard Kinder said that El Paso assets are primarily regulated interstate natural gas pipelines that produce a substantial stable cash flow and have access to key supply regions and major consuming markets.

"The natural gas pipeline systems of the two companies are very complementary, as they primarily serve different supply sources and markets in the US," Kinder said.