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BP to buy out U.S. pipeline partnership in $723 million deal

BP to buy out U.S. pipeline partnership in $723 million deal
BP to buy out U.S. pipeline partnership in $723 million deal   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p> – BP will acquire the remaining stake in its U.S. pipelines partnership BP Midstream Partners LP that it doesn’t already own in a more than $700 million deal, as the energy giant looks to simplify its structure.</p> <p>The company said on Monday BP Midstream unitholders will receive 0.575 of a BP American depositary share for each unit they hold, translating to a total price of about $723 million for the deal, according to Reuters calculations. BP already owns roughly 54% of the partnership, Refinitiv data shows.</p> <p>BP created BP Midstream Partners as a master limited partnership (<span class="caps">MLP</span>) to own, operate, and buy mainly fee-based oil-transporting pipelines and storage assets. It made an offer in August to buy the remainder of BP Midstream.</p> <p>“This transaction will deepen BP’s interests in, and simplifies the ownership and governance structure of, midstream assets that support … its fuels value chain in the United States,” BP said in a statement.</p> <p>The oil and gas industry has financed billions in pipeline and storage products under tax-advantaged <span class="caps">MLP</span>s since the 1980s, but several pipeline companies have restructured in recent years after U.S. regulators said they will no longer be allowed to recover an income tax allowance.</p> <p>U.S. refiner Phillips 66 unveiled a similar deal in October when it said it would buy the remaining units of Phillips 66 Partners for $3.4 billion.</p> <p/> </div>