Phillips 66, Houston, has struck a deal to acquire all of the publicly held common units representing limited partner interests in DCP Midstream, Denver, for $3.8 billion (cash consideration of $41.75 per common unit). The deal increases Phillips 66’s economic interest in DCP Midstream to 86.8% and enhances its existing NGL platform through value chain integration, the company said in a release Jan. 6.
In combination with the 2022 realignment of Phillips 66’s economic and governance interests in DCP Midstream, the transaction is expected to generate an incremental $1 billion of adjusted EBITDA for Phillips 66, the company said (OGJ Online, Aug. 18, 2022).
The company also expects to capture operational and commercial synergies of at least $300 million by integrating DCP Midstream into its existing midstream business.
In early December, Phillips 66 said its 2023 capital program of $2 billion includes a midstream capital plan of $639 million comprised of $329 million for sustaining projects and $310 million for growth projects, which it said will be directed toward enhancing the company’s integrated NGL value chain from wellhead to market.
The deal for DCP Midstream's common units is expected to close in second-quarter 2023, subject to customary closing conditions.
