bp to acquire all of its midstream partners in the U.S.
The company agreed to exchange each Public Common Units that unitholders have for 0.575 of an American Depositary Share of bp.
bp has entered an agreement with its affiliates and bp Midstream Partners LPM (BPMP) to buy all outstanding common units of BPMP not already owned directly or indirectly by the group, defined by bp as “Public Common Units”, a total of 47,837,828 common units. Each unitholder of the Public Common Units would receive 0.575 of an American Depositary Share of bp in exchange for each Public Common Units owned.
The transaction reflects the announcement of bp Pipelines last August that it will acquire the publicly traded units of BPMP. It is also part of the group’s strategy to become an integrated energy company and also gives BPMP unitholders the opportunity to take part in these plans. The agreement will not only simplify the ownership and governance structure of midstream assets but will also deepen bp’s interest in integration and optimisation of its fuels value chain in the country.
A conflicts committee of the Board of Directors of BP Midstream Partners GP LLC, consisting exclusively of independent directors, has been delegated the authority to review, evaluate, negotiate and approve the transaction on behalf of BPMP and the public unitholders. The committee approved the transaction unanimously after evaluating it in consultation with its independent legal and financial advisors.
The transaction is currently subject to customary approvals, but it's expected to close in the first quarter of 2022. A subsidiary of bp, which holds a majority of the outstanding common units, has committed to vote its units to approve the transaction.
BPMP currently owns one onshore crude oil pipeline system (BP2), one onshore refined products pipeline system (River Rouge), one onshore diluent pipeline system (Diamondback), interests in four offshore crude oil pipeline systems (Mardi Gras, Caesar, Proteus and Endymion), and an interest in one offshore natural gas pipeline system (Cleopatra).
The subsidiary was founded in 2017 and commenced its initial public offering in August of that year, with a total of 42,500,000 common units representing limited partner interests at a price of $18.00 per unit.
