May 23, 2024

Sunoco LP’s Acquisition of NuStar Energy L.P. Marks Major Milestone in Energy Sector

In a move that reverberated across the energy sector, Sunoco LP, based in Dallas, Texas, has completed its acquisition of San Antonio-based NuStar Energy L.P., marking a significant milestone in both companies’ histories.

The acquisition, which was eagerly anticipated, received resounding approval from NuStar’s unitholders during a special meeting convened on May 1, 2024. With the finalization of the deal, NuStar’s common units ceased trading on the New York Stock Exchange, symbolizing the start of a new chapter under Sunoco’s umbrella.

This strategic merger not only bolsters Sunoco’s financial position but also augments its capacity for growth and stability. By leveraging synergies, the company anticipates unlocking a wealth of benefits, including substantial expense reductions and enhanced cash flow from refinancing endeavors. These synergies are projected to yield at least $150 million in savings, with an additional $50 million per annum expected from refinancing activities. Moreover, Sunoco foresees immediate accretion to distributable cash flow per LP unit, with accretion exceeding 10% by the third year post-transaction.

In tandem with this landmark acquisition, Sunoco has announced a 4% increase in its quarterly distribution, a testament to its unwavering confidence in the business’s trajectory. The Board of Directors of Sunoco’s general partner has declared a quarterly distribution of $0.8756 per common unit, translating to $3.5024 per common unit on an annualized basis. This distribution, slated for May 20, 2024, underscores Sunoco’s commitment to delivering value to its stakeholders.

With this transformative acquisition and distribution increase, Sunoco is poised to reinforce its position as a leading player in the energy landscape. Investors and industry observers alike eagerly anticipate further insights into the NuStar acquisition and distribution increase during Sunoco’s first-quarter 2024 conference call scheduled for May 8, 2024, at 9:00 a.m. Central Daylight Time.