DCP Midstream LP

History

2023: Company Sale

On January 6, 2023, Phillips 66 announced the purchase of DCP Midstream LP in a deal that values the acquired pipeline operator at approximately $8.7 billion. The takeover will help boost Phillips 66 "liquid natural gas business, Reuters points out.

The deal, the first major move by Mark Lashear, who took over as CEO of Phillips 66 in July 2022, would double the company's stake in DCP Midstream to 86.8%. In December 2022, Phillips 66 pledged to increase spending on new projects by about 6% in 2023, focusing on strengthening its pipeline business.

Phillips 66 buys pipeline operator DCP Midstream LP

The Phillips 66 energy company USA is engaged in the transportation and trading of oil, petroleum products and natural gas, and also owns a 50% stake in the large petrochemical company Chevron Phillips Chemical.

The refiner is buying state units for $3.8 billion, or $41.75 per share, up from a previous offer of $34.75 per share. DCP Midstream rose nearly 6.4% to $41.84 and Phillips 66 rose 1.1%. Canadian pipeline operator Enbridge owns the remaining 13.2% stake in general partner DCP.

The DCP deal is expected to bring Phillips 66 an additional adjusted EBITDA of $1 billion, the refinery said in a statement. Phillips said it expects to save at least $300 million by integrating DCP into its existing oil transportation and refining business.

The refiner plans to fund the deal through a combination of cash and debt. The deal, which was approved by Phillips as the majority owner of DCP, is expected to close in the second quarter of 2023. DCP does not require transaction approval from other holders of the company's common stock.^[1]

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