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Energy company Kinder Morgan, Inc. (KMI) has announced that it will consolidate its partner interests in Kinder Morgan Energy Partners, L.P. (KMP) - the joint venture partner of Battleground Oil Specialty Terminal Company (BOSTCO) - Kinder Morgan Management, LLC (KMR) and El Paso Pipeline Partners, L.P. (EPB) in a move designed to combine Kinder Morgan's disparate partnerships into a single company in order to facilitate growth for North America's largest pipeline business.

The deal will combine all the oil and gas pipeline partnerships of billionaire Richard Kinder under one roof as it restructures Kinder Morgan as one corporation from a master limited partnership structure. The combined entity, KMI, will be the largest energy infrastructure company in North America.

KMP unitholders are due to receive 2.1931 KMI shares and $10.77 in cash for each KMP unit. This results in a price of $89.98 per unit, a 12 percent premium based on the Aug. 8, 2014, closing prices. This is a premium of 11.4 percent based on the July 16 closing price reference date used by the parties during the negotiation of the transaction.

KMR shareholders are due to receive 2.4849 KMI shares for each share of KMR. This results in a price of $89.75 per share, a 16.5 percent premium based on the Aug. 8, 2014, closing prices. This is a premium of 16 percent based on the July 16 reference date used by the parties in the negotiation. The parties negotiated consideration for KMR shares equal to the consideration for KMP units, using the July 16 reference date.

EPB unitholders will receive .9451 KMI shares and $4.65 in cash for each EPB unit. This results in a price of $38.79 per unit, a 15.4 percent premium based on the Aug. 8, 2014, closing prices. This is a premium of 11.2 percent based on the July 16 reference date used by the parties in the negotiation.

KMI says it has secured committed financing for the cash portion of the transaction.

"All shareholders and unitholders of the Kinder Morgan family of companies will benefit as a result of this combination," said Chairman and CEO Richard D. Kinder. "Everyone will hold a single, publicly traded security – KMI – which will have a projected dividend of $2.00 in 2015, a 16 percent increase over the anticipated 2014 dividend of $1.72. We expect to grow the dividend by approximately 10 percent each year from 2015 through 2020, with excess coverage anticipated to be greater than $2 billion over that same period. This combined entity will be the largest energy infrastructure company in North America and the third largest energy company overall with an estimated enterprise value of approximately $140 billion. Additionally, we will have a leading position in each of our business segments and operate in the rapidly growing North American energy infrastructure sector."

"This transaction dramatically simplifies the Kinder Morgan story, by transitioning from four separately traded equity securities today to one security going forward, and by eliminating the incentive distribution rights and structural subordination of debt," Kinder said. “Further, we believe that KMI will be a valuable acquisition currency and have a significantly lower hurdle for accretive investments in new energy infrastructure. In the opportunity-rich environment of today’s energy infrastructure sector, we believe this transaction gives us the ability to grow KMI for years to come."

The boards of all the Kinder Morgan companies have voted to recommend the transaction to their respective unitholders and shareholders. Each transaction is conditioned on the closing of the other transactions.

Following unitholders and shareholder votes and standard regulatory notifications and approvals, the transaction is expected to close by the end of 2014.

Barclays and Citi acted as financial advisors to KMI, Barclays is providing committed financing for the transaction, and Weil Gotshal & Manges and Bracewell & Giuliani acted as legal counsel to KMI. Jefferies acted as financial advisor to KMP and KMR and Baker Botts acted as legal counsel to KMP and KMR. Tudor, Pickering, Holt & Co. acted as financial advisor to EPB and Vinson & Elkins acted as legal counsel to EPB.