Shell USA and Shell Midstream Partners have executed a definitive agreement and plan of merger under which Shell USA will acquire all the common units representing limited partner interests in Shell Midstream.
Shell USA will buy all the public common units at $15.85 per unit in cash for a total value of approximately $1.96 billion. A subsidiary of Shell USA currently owns 269,457,304 Shell Midstream Partners common units, or around 68.5 percent.
Shell Midstream Partners’ assets include interests in entities that own crude oil and refined products pipelines and terminals that serve as key infrastructure to transport onshore and offshore crude oil production to U.S.
Gulf Coast and Midwest refining markets and deliver refined products from those markets to major demand centers, as well as storage tanks and financing receivables that are secured by pipelines, storage tanks, docks, truck and rail racks, and other infrastructure used to stage and transport intermediate and finished products.
Its assets also include interests in entities that own natural gas and refinery gas pipelines that transport offshore natural gas to market hubs and deliver refinery gas from refineries and plants to chemical sites along the U.S. Gulf Coast.
The Board of Directors of Shell Midstream Partners GP, the general partner of Shell Midstream Partners, delegated to a conflicts committee of the company, consisting solely of independent directors, the review, evaluation, negotiation, and determination of whether to approve and to recommend that the Shell Midstream Partners approve the transaction.
The Conflicts Committee, after evaluating the transaction in consultation with its independent legal and financial advisors, unanimously approved and recommended that the Shell Midstream Partners board approve the transaction.
Following receipt of the recommendation of the Conflicts Committee, the company reviewed the terms of the transaction and the merger agreement, and unanimously approved the transaction.
The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions. A subsidiary of Shell USA, as the holder of a majority of the outstanding Shell Midstream Partners common units, has delivered its consent to approve the transaction concurrently with the execution of the merger agreement.