9 hours ago
Plains All American, Plains GP to sell NGL business to Keyera for $3.75B
Plains All American (PAA) and Plains GP Holdings (PAGP) announced that it has executed definitive agreements with Keyera pursuant to which Plains will sell substantially all of its NGL business to Keyera for a total cash consideration of approximately C$5.15B, or $3.75B. The transaction is expected to close in the first quarter of 2026, and is subject to customary closing conditions, including regulatory approvals. As a result of the transaction, Plains will divest its Canadian NGL business but will retain substantially all NGL assets in the United States and will also retain all crude oil assets in Canada. Proceeds from the transaction are expected to be approximately $3B net after: taxes; transaction expenses and a potential one-time special distribution. The estimated 35c per unit special distribution is intended to offset potential individual tax liabilities associated with the transaction and is subject to board approval, ultimate tax implications, and successful closing of the transaction. Proceeds from the transaction will be prioritized toward: bolt-on M&A to extend and expand the crude oil focused portfolio; capital structure optimization including potential repurchases of Series A and Series B Preferred units and common unit repurchases. Closing of this transaction is a taxable event that is expected to result in a flow through of taxable income to the holders of PAA common units and impact the taxability of distributions to the holders of PAGP Class A shares. The tax impact on each holder of PAA common units will vary based on their specific tax circumstances, including their individual ownership, previous passive loss limitations where applicable, tax basis and their holding period. We currently estimate that PAA will incur approximately $360M of entity-level taxes payable in Canada associated with the sale of the NGL business and the restructuring of our remaining Canadian crude assets. This is expected to generate a foreign tax credit for PAA common unitholders at close of the transaction that, along with utilization of passive activity loss carry forwards, if any, will offset a significant portion of the taxable gain passed through to individual unitholders.
Confident Investing Starts Here:
