Plains All American Pipeline LP (NYSE: PAA) and PAA Natural Gas Storage LP (NYSE: PNG) completed the merger of PNG with a wholly owned subsidiary of PAA, the Houston-based companies jointly announced Dec. 31.
PNG survives the merger as a wholly owned subsidiary of PAA, effective Dec. 31. PNG’s common unitholders approved the merger in a special meeting held Dec. 31 in Houston. Under the terms of the merger agreement, each PNG unitholder eligible to receive the merger consideration will receive 0.445 common units of PAA for each PNG common unit owned by such unitholder, plus cash in lieu of any fractional common units of PAA otherwise issuable in the merger.
The transaction is expected to result in the issuance of some 14.7 million common units of PAA. In connection with the closing of the merger, the owners of PAA’s general partner have agreed to reduce their incentive distribution rights under PAA’s agreement of limited partnership by $12 million in each of 2014 and 2015, $10 million in 2016 and $5 million per year thereafter.
As a result of the completion of the merger, common units of PNG will be delisted and, as of the opening of the stock market on Jan. 2, will no longer be publicly traded. PAA common units will continue to be traded on the New York Stock Exchange under the ticker symbol “PAA.”
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