Kinder morgan energy partners, l.p. Acquisition of copano energy, l.l.c Harvard Case Solution & Analysis

1. Provide a detailed description of the merger/restructuring deal. Attach supporting exhibits.

Kinder Morgan Energy L.P made an acquisition of the outstanding units of Copano and the acquisition price that had to be paid for Copano energy LLC was approximately $5 billion. This merger or the restructuring deal also included the assumption of debt. Moreover, the approval of the transaction of was given by the unit holders of Copano on 30th April.

Despite this, almost more than 99% of the units were voted in order to make this merger successful and most of them were voted in the favor of this transaction. This transaction was also approved by the board of directors of both companies and this was comprised of a 100 percent unit for unit transaction. Besides, in this restructuring deal the exchange ratio of 0.4563 units of KMP per Copano unit.

The deal has also taken account of the share price that was offered and this included that $40.91 per share offer price was offered as compared to the target share price that was set by the Copano Energy was $41.00 per share, respectively. Moreover, Kinder Morgan Energy L.P is the leader in the pipeline transportation market and it is also famous as an energy storage company.

On the other hand, Copano energy is also operating in the same industry sector as an energy company that is involved in providing the services based upon the natural gas, which is mainly comprised of the processing and transportation of natural gas

2. What are the perceived value drivers of the proposed deal, both internal to the business environment of the firms involved and also taking account of broader industry trends? Discuss separately any operational, managerial, and financial synergies expected to result from the deal. Also discuss any antitrust issues associated with the deal

The most important value driver for this proposed deal is comprised of the ability of Copano Energy in order to enable Kinder Morgan Energy to bring an expansion in its midstream services footprint. Despite that, this merger will also act as a value driver for the success of this deal in terms of enabling the company to provide a variety of services to its customers which will result in the increased customer based.

Hence, due to the presence of related diversification these are the perceived value drivers that are related to the both the internal and as well as the external environment. Thereby, by taking account of the industry trend, it can be seen that the vision that was adopted by Kinder Morgan was highly successful and it was proven by KMP being the largest public limited partnership having its trade related to pipelines

Moreover, there are also expectations that are based upon the synergies that will result after the successful completion of this deal. Firstly, there are greater chances that the operational synergies will result from this deal because Kinder Morgan Energy and the Copano Energy will be able to perform better after the combination of these two companies and there will be an increase in the economies of scale. The managerial synergies will also result because there will be a presence of the experienced management who will be operating in the same industry sector.Despite this, the financial synergy has a great significance because the ultimate reason behind any merger is the achievement of the financial benefit of the shareholders of both the target company and the acquiring company.Apart from that, this deal was also subject to the antitrust issues which was comprised of the approval and was related to the vote of Copano’s shareholders but this was not taken into the schedule yet.

3. Discuss specific structural aspects of the deal including choice of a particular corporate structure for the final corporate entity (if applicable), the choice of payment (cash and/or stock), and the use of collars to protect the shareholders of one or more of the parties to the deal. Attach supporting exhibitsKinder morgan energy partners, l.p. Acquisition of copano energy, l.l.c Case Solution

By taking account of the particular corporate structure, it is clear that this will refer to the organizing of business in order to accomplish the objectives. Hence, there may be a series of discussions based upon the control, ownership as well as the authority that the final corporate entity will have. Moreover, the method of payment method that has been used by Kinder Morgan Energy is the stock price and this evident by taking into account the stock price that they have offered to acquire the shares of Copano Energy which is almost $40.91 per share...........................

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