Apollo and El Paso reached a $7.15 billion agreement for El Paso’s E&P segment. The deal is subject to the closing of the El Paso-Kinder Morgan pipeline merger.
El Paso’s exploration and production segment has been on the sales block since the Kinder Morgan deal was announced, but the question remained whether the assets would be sold in pieces or all together.
While Apollo has been rumored to be considering the deal, it comes as a bit of a surprise that the private equity group acquire El Paso E&P. Most industry experts thought El Paso would be a great fit for an international company looking to expand its footprint in the U.S. (e.g. Statoil-Brigham). Low natural gas prices that are limiting many companies’ upstream budgets might have opened a window for the Apollo group to step in. [Read more…]