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Company is working with advisers to gauge buyer interest
Colonial Pipeline is backed by investors including KKR, CDPQ
Colonial Pipeline Co., operator of the largest US fuel pipeline system, is weighing options including a sale that could value the company at more than $10 billion, people familiar with the matter said.
The Alpharetta, Georgia-based company is working with advisers as it seeks to gauge interest from potential buyers, according to the people, who asked not to be identified discussing confidential information. It could draw interest from financial institutions, such as infrastructure funds, as well as strategic suitors, one of the people said.
Colonial Pipeline operates one of the most vital fuel pipeline systems in the US, covering more than 5,500 miles from Houston to New Jersey. The company is owned by subsidiaries of private equity firm KKR & Co., Canadian pension fund Caisse de Dépôt et Placement du Québec, oil major Shell Plc, investment firm IFM Investors and conglomerate Koch Industries LLC.
Reuters reported in June that some of Colonial Pipeline’s owners were exploring divesting their stakes. Deliberations are at an early stage and there’s no certainty that Colonial Pipeline will decide to pursue a sale, the people said. Representatives for CDPQ, Colonial Pipeline, IFM, KKR and Shell declined to comment, while a spokesperson for Koch didn’t immediately provide comment.
Building oil and gas pipelines in the US is difficult, as a result of legal challenges from environmental groups, political opposition in Democratic states and a glacial federal permitting process. Dealmaking in the sector has been mostly small-scale, though there have been signs this year that things are changing.
During the summer, ONEOK Inc. agreed to buy Global Infrastructure Partners’ entire interest in EnLink Midstream LLC and its equity interests in Medallion Midstream, the largest closely held crude gathering and transportation system in the Permian Basin. The deals were valued at a combined $5.9 billion. Meanwhile, Bloomberg News reported in September that Targa Resources Corp., one of the largest independent midstream operators, had received takeover interest from its bigger rival Williams Cos.
Still, the value of pipeline deals globally is down by more than a third this year at about $54.4 billion, data compiled by Bloomberg show, bucking the broader recovery in mergers and acquisitions in 2024.
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