Kinder Morgan Inc.’s share price up, to consolidate pipeline empire into one corporation in a $44-billion deal

Kinder Morgan Inc. revealed in a statement that it intends to acquire all of Kinder Morgan Energy Partners LP, El Paso Pipeline Partners LP and Kinder Morgan Management LLC in a series of transactions, valued at about $44 billion as billionaire owner Mr Kinder aims to consolidate the pipeline empire and boost its growth.

The Chief Executive Officer of the company Mr. Kinder said in a statement, which was cited by the Financial Times: “This transaction dramatically simplifies the Kinder Morgan story.” He also added: “In the opportunity-rich environment of today’s energy infrastructure sector, we believe this transaction gives us the ability to grow for years to come.”

The goal of Mr. Kinder is to unite its oil-and-gas pipeline empire into a single company, while investors are worried about the prospects of growth.

Still, the owner of the company, who is also its founder and CEO considers that the transactions, which are to combine the four publicly traded divisions into one corporation, “will allow us to further expand the reach of the kind of projects we can do” as he said in an interview cited by the Wall Street Journal.

Currently, Kinder Morgan Inc. runs about 80 000 miles of oil and gas pipelines on the territory of North America. As the corporations founder Mr. Richard Kinder explained, the combined group plans to use its shares as a currency for further growth through acquisitions and investments. The acquisitions enterprise value including assumed debt amounts to $71 billion.

According to a presentation uploaded on the companys website, the potential takeover goals of Kinder Morgan Inc. include more than 120 energy MLPs, which combined value is estimated to about 875 billion dollars. The company is also to become more focused on its new projects such as expanding shale exploration and offering more products in its portfolio, as the industry will need about 640 billion investments in new pipelines and storage tanks through 2035.

Kinder Morgan Inc. was 2.12% up to close at 36.12 dollars per share on Friday, marking a one-year change of -3.94%. According to the information published on CNN Money, the 13 analysts offering 12-month price forecasts for Kinder Morgan Inc. have a median target of $38.00, with a high estimate of $45.00 and a low estimate of $36.00. The median estimate represents a +5.20% increase from the last price of $36.12.