$KMI Kinder Morgan Inc. ($19.28), is planning to sell 50% of its stake in the Southern Natural Gas pipeline to $SO Southern Company ($53.76). The price of the sale is $1.47 billion.
Kinder Morgan is a company headquartered in downtown Houston, Texas. It is the largest energy infrastructure company in North America.
Steve Kean, CEO of Kinder Morgan, said in a press release the company will use proceeds from the transaction to pay down debt.
“The transaction significantly advances our effort to strengthen our balance sheet and move us closer to returning value to shareholders in the form of an increased dividend or stock repurchases”, Kinder Morgan Chief Executive Steve Kean said in a statement.
The two companies will share the systems expansion cost, which is a major factor for Kinder Morgan, as well as try to work together on additional projects expanding the pipeline system.
Southern Company is an American electric utility holding company based in the southern United States. It is headquartered in Atlanta, Georgia, with executive offices also located in Birmingham, Alabama
The transaction is subject to the notification and clearance and reporting requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The companies expect to complete the transaction in the third quarter or early in the fourth quarter of 2016.
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