Houston-based Targa Resources will buy Atlas Pipeline Partners and Atlas Energy in a deal worth $7.7 billion.
Targa will acquire Atlas Pipeline Partners for $5.8 billion, including $1.8 billion of debt.
Atlas Energy will spin-off its non-midstream assets prior to the sale. Targa will then pay about $1.86 billion for Atlas Energy including 10.35 million Targa Resource Corporation shares valued at about $1.25 billion and $610 million in cash.
The purchase gives Targa additional assets at the Eagle Ford, Permian, Mississippi Lime and Woodford plays.
The deal brings Targa’s combined processing capacity at the Permian play to 1.4 million cubic feet per day with 10,250 miles of pipelines.
Targa Resources will finance the cash components of the transaction with $1.1 billion in committed financing.
Targa Resource Partners L.P. projects an 11 percent to 13 percent distribution growth in 2015 and Targa Resources Corporation expects 35 percent dividend growth in 2015.
“The acquisitions will significantly and immediately increase our scale and geographic diversity, accelerating the growth of our premier North American midstream platform,” Targa CEO Joe Bob Perkins said.