RTTNews | Oct 27, 2021 09:34AM EDT

09:33 Wednesday, October 27, 2021 (RTTNews.com) - Phillips 66 (PSX), and Phillips 66 Partners (PSXP), on Wednesday announced that they have entered into a definitive agreement whereby Phillips 66 would acquire all of the publicly held common units representing limited partner interests in Phillips 66 Partners, not already owned by Phillips 66 and its affiliates.

Phillips 66 is a diversified energy manufacturing and logistics company. Phillips 66 Partners is a master limited partnership formed by Phillips 66 to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum products and natural gas liquids pipelines, terminals and other midstream assets. Both are headquartered in Houston.

The agreement, expected to close in the first quarter of 2022, provides for an all-stock transaction in which each outstanding PSXP common unitholder would receive 0.50 shares of PSX common stock for each PSXP common unit. Phillips 66 Partners' preferred units would be converted into common units at a premium to the original issuance price prior to exchange for Phillips 66 common stock.

The transaction value of the units being acquired is approximately $3.4 billion based on Oct. 26, 2021 market closing prices of both companies. Upon closing, Phillips 66 Partners would become a wholly owned subsidiary of Phillips 66 and would no longer be a publicly traded partnership. Phillips 66 Project Development Inc., a wholly owned subsidiary of Phillips 66 and the holder of a majority of the outstanding common units of Phillips 66 Partners, has voted its units to approve the transaction.

Citi and BofA Securities, Inc. are acting as financial advisors to Phillips 66, and Latham & Watkins LLP is acting as Phillips 66's legal advisor.

The terms of the transaction were unanimously approved by the board of directors of the general partner of Phillips 66 Partners. The conflicts committee engaged Evercore as its financial advisor and Vinson & Elkins L.L.P. as its legal advisor.

Shares of Phillips 66 are currently trading in premarket at $80.40, down $1.82 or 2.21 percent from previous close. Shares of Phillips 66 Partners LP are currently trading in pre-market at $40.50, up $1.29 or 3.29 percent from previous close.

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