Kinder Morgan to Buy El Paso for $21 Billion in Big Bet on Natural Gas Market
(Reuters) - Kinder Morgan Inc. struck a $21 billion deal to buy rival El Paso Corp., combining the two largest natural gas pipeline operators in North America in a huge bet on the fast-growing market for that fuel. The cash and stock deal announced on Sunday values El Paso at a 37% premium to its Friday market value, and comes as Exxon Mobil Corp. and other oil majors are spending billions of dollars to develop and produce shale gas and crude oil in areas with poor infrastructure. Kinder Morgan went public in February after CEO Kinder and private equity firms including Carlyle Group and Goldman Sachs Inc.'s buyout arm Highstar Capital and Riverstone Holdings took the company private in a management led buyout in 2007. The private equity firms sold a 13.5% stake in the company's IPO, but Kinder and the buyout funds still hold a vast majority of the company.
