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MPLX and MarkWest Announce Merger to Create Diversified Midstream Company

Strategic Insights

— 1 min read

The merger of MPLX LP and MarkWest Energy Partners, L.P. marks a significant development in the midstream industry, solidifying MPLX's position as a leading player. The combined entity plans to maintain a "peer-leading" distribution growth profile of approximately 20 percent in years 2018 and 2019. The merger also aims to leverage the stronger financial position of the combined company and support from its investment-grade sponsor, Marathon Petroleum Corporation.

Key Takeaways:

  • The merger is expected to result in a combined entity with a strong financial position, enabling it to capitalize on growth opportunities and support its distribution growth objectives.
  • The combined company plans to maintain a "peer-leading" distribution growth profile of approximately 20 percent in years 2018 and 2019.
  • The merger aims to leverage the stronger financial position of the combined company and support from its investment-grade sponsor, Marathon Petroleum Corporation.
  • The combined entity will have a network of common carrier crude oil and products pipeline assets located in the Midwest and Gulf Coast regions of the United States.
  • The merger is subject to regulatory approval and the satisfaction of other customary conditions.

Statistics:

  • MPLX's anticipated distribution growth in 2015 is 29 percent.
  • The combined entity anticipates a 25 percent compound annual distribution growth rate through 2017.
  • The combined entity's "peer-leading" distribution growth profile implies an annual distribution growth rate of approximately 20 percent in years 2018 and 2019.

Sources:

  • MPLX LP, "MPLX and MarkWest Energy Partners, L.P. Announce Definitive Merger Agreement," July 20, 2015.
  • MarkWest Energy Partners, L.P., "MarkWest Energy Partners, L.P. and MPLX LP Announce Definitive Merger Agreement," July 20, 2015.
  • Comtex SmarTrend Alert, "DOWNTREND on 05-09-2012 for MWE @ $54.92," July 16, 2015.
  • Marathon Petroleum Corporation, "MPLX and MarkWest Energy Partners Announce Definitive Merger Agreement," July 20, 2015.

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