BANGALORE (Reuters) - Midstream energy services provider Enterprise Products Partners LP said it would buy Enterprise GP Holdings LP for about $8.03 billion to reduce its capital costs and simplify its partnership structure.
Enterprise Holdings owns the general partner of, and limited partner interests in, Enterprise Products.
Under the deal, Enterprise GP unitholders would receive 1.5 Enterprise Products common units in exchange for each Enterprise GP limited partner unit.
The deal values Enterprise GP at about $57.68 share, a premium of 16 percent to the stock's Friday close.
Enterprise GP has about 139.2 million shares outstanding as of August 1, according to Thomson Reuters data.
The merger will lower Enterprise Products' long-term cost of capital through the permanent elimination of the general partner's incentive distribution rights.
Enterprise Products said the costs saved on the incentive distribution will be invested in organic growth projects and acquisitions.
Enterprise GP will become a unit of Enterprise Products.
Units of Enterprise Products closed at $38.45 Friday on the New York Stock Exchange. Units of Enterprise GP, which have risen over 80 percent over the last 52 weeks, closed at $49.90.
(Reporting by Thyagaraju Adinarayan in Bangalore)
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