Top US pipeline company Kinder Morgan said on Sunday it will put all its publicly traded units under one roof in a $70-billion deal, responding to investor concerns about its growth prospects and complicated financial structure.
The oil and gas pipeline company said it would shed the tax-advantaged legal structure it had popularised during the US shale boom, the Master Limited Partnership (MLP), and fold its units into one company with a market capitalisation of $92 billion organized as a C-corporation.
The affect companies were being
evaluated. A source familiar with the matter said Kinder Morgan’s overall valuation had suffered because it traded as four entities and the market struggled to understand it.
The MLP structure also required the units to hand over some 40% of their cash to general partners, hurting Kinder Morgan's ability to make acquisitions that will now be easier to carry out, the source added.