Phillips 66 agrees to acquire Phillips 66 Partners

Phillips 66 (PSX) agreed to acquire all of the publicly held common units representing limited partner interests in Phillips 66 Partners (PSXP) not already owned by Phillips 66 and its affiliates.

The agreement, expected to close in the first quarter of 2022, provides for an all-stock transaction in which each outstanding PSXP common unitholder would receive 0.50 shares of PSX common stock for each PSXP common unit. Phillips 66 Partners’ preferred units would be converted into common units at a premium to the original issuance price prior to exchange for Phillips 66 common stock.

“We are announcing an agreement to acquire all outstanding units of Phillips 66 Partners,” says Greg Garland, chairman and CEO of Phillips 66. “We believe this acquisition will allow both PSX shareholders and PSXP unitholders to participate in the value creation of the combined entities, supported by the strong financial position of Phillips 66.”

The transaction value of the units being acquired is approximately $3.4 billion based on Oct. 26 market closing prices of both companies. Upon closing, Phillips 66 Partners will be a wholly owned subsidiary of Phillips 66 and will no longer be a publicly traded partnership. Phillips 66 Project Development Inc., a wholly owned subsidiary of Phillips 66 and the holder of a majority of the outstanding common units of Phillips 66 Partners, has voted its units to approve the transaction.

Citi and BofA Securities Inc. are acting as financial advisers, and Latham & Watkins LLP is acting as legal adviser.

The terms of the transaction were unanimously approved by the board of directors of the general partner of Phillips 66 Partners based on the unanimous approval and recommendation of its conflicts committee, composed entirely of independent directors. The conflicts committee engaged Evercore as its financial adviser and Vinson & Elkins LLP as its legal adviser.

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