On October 17 Kinder Morgan, Inc., agreed to pay $21 billion in cash and stock for rival natural gas pipeline operator El Paso Corporation in an acquisition that will create the largest such company in North America. Kinder Morgan will also assume $17 billion of debt in the deal—the second-largest in the United States this year after AT&T Inc.’s agreement to buy T-Mobile USA from Deutsche Telecom AG for $39 billion [Big Deals, June].
El Paso shareholders stand to receive consideration worth $26.87 a share, a 37 percent premium to the target’s closing price on October 14, the last trading day before announcement. Target shareholders can opt for cash and a warrant worth 96 cents per El Paso share or a mix of cash, stock, and the warrant.
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