UGI to Acquire 100% of the Publicly Held Units of AmeriGas Partners, L.P.
UGI Corporation (NYSE: UGI) and AmeriGas Partners, L.P. (NYSE: APU; “AmeriGas”) announced today that they have entered into a merger agreement under which UGI will fully consolidate its ownership of AmeriGas, the nation’s largest retail propane marketer, by acquiring the 69.2 million publicly held common units it does not already own. Under the terms of the agreement, AmeriGas unitholders will receive 0.50 shares of UGI common stock plus $7.63 in cash consideration for each common unit of AmeriGas, representing a premium of 21.9% to AmeriGas’ 30-day volume weighted average price and a 13.5% premium to the April 1, 2019 closing price of $31.13. AmeriGas unitholders will continue to receive a $0.95 per unit distribution for each quarter completed prior to the closing of the merger.
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As part of the transaction, AmeriGas will no longer be a Master Limited Partnership (“MLP”) and will instead become a wholly owned subsidiary of UGI. UGI currently holds an approximate 26% ownership interest in AmeriGas. AmeriGas Propane, Inc., a wholly owned UGI subsidiary, has served as AmeriGas’ sole general partner since 1995 (the “General Partner”).
The General Partner’s Audit Committee, comprised entirely of independent directors, after consultation with its independent legal and financial advisors, unanimously approved the merger agreement and determined it to be fair and reasonable to, and in the best interests of, AmeriGas and the unitholders unaffiliated with UGI. Subsequently, the transaction was approved by the Boards of both UGI and the General Partner.
“Our two companies have a long and successful history of working together, spanning 60 years,” said John L. Walsh, President and Chief Executive Officer of UGI. “A consolidation of AmeriGas’ ownership maximizes value for both companies and our respective stakeholders, as we will be better positioned to invest and grow. In particular, we welcome AmeriGas’ current unitholders and look forward to being exceptional stewards of their capital.”
The closing of the merger is subject to satisfaction of customary conditions. Under the partnership agreement, the merger is required to be approved by a majority of the outstanding AmeriGas common units. Affiliates of UGI own approximately 26% of the outstanding common units and have entered into a support agreement with AmeriGas whereby they have agreed to vote their common units in favor of the transaction.