Sunoco and NuStar Stocks Combined in $7.3 Billion Energy Deal – Investor Business Daily

Sunoco and NuStar Stocks Combined in $7.3 Billion Energy Deal – Investor Business Daily

Nustar Energy (NS) shares were up more than 20% early Monday, looking to hit their highest level in nearly four years, after it announced it would merge with… Sunoco (SUN) in an all-stock deal valued at $7.3 billion, including debt. SUN shares fell on Monday. Both companies are high-yield dividend stocks.




X



Holders of NuStar common units will receive 0.400 Sunoco common units per NuStar common unit, which is a 24% 30-day volume-weighted average price for NuStar and Sunoco as of Jan. 19, according to the press release. Dallas-based Sunoco secured a $1.6 billion, 364-day bridge loan to refinance NuStar’s Series A, B and C preferred units, subordinated notes, revolving credit facility and receivables financing agreement.

NuStar and Sunoco expect the deal to close in the second quarter. The companies expect the combination to create $50 million annually in additional cash flow while also generating “at least” $150 million in run-rate synergies within three years.

Sunoco’s market cap is about $5 billion while NuStar’s market cap is about $2.2 billion. Both companies are master limited partnerships, with Sunoco currently yielding 5.7% and NuStar offering a yield of 8.9%.

NuStar arrowheads for point of purchase

NS shares jumped 18.4% during Monday’s market action. Sunoco stock fell about 4.6%. On Friday, SUN shares fell 1.7% to 59.46 while NuStar shares closed at 18.03.

Sunoco is an automotive fuel distributor to thousands of locations in 40 U.S. states. Meanwhile, Nustar, based in San Antonio, transports and stores petroleum products. NuStar’s business segments include pipelines, storage and fuel marketing.

As of the beginning of 2023, NuStar had 9,465 miles of pipeline and 63 terminals and storage facilities, providing approximately 49 million barrels of storage capacity, according to federal filings.

NuStar stock is currently in a flat base with an official buy point of 19.32, according to MarketSmith analysis. Sunoco was extended, after rising nearly 28% following the September breakout.

sRent to follow Kit Norton on X, formerly known as Twitter, @ketnorton For more coverage.

You may also like:

Is Tesla stock a buy or sell?

Stocks near buy zone

Learn how to pick great stocks? Read Investor Corner

MarketSmith: Research, charts, data and training in one place

Will Rivian be bought out now with the Cybertruck hype?

The market rally shows bullish breadth; Apple leads 6 new purchases

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *