Sunday, August 10, 2014

Kinder Morgan to combine its companies

NEW YORK (AP) — The group of oil and gas pipeline and storage companies controlled by Kinder Morgan but traded separately will combine and become the 4th biggest U.S. energy company by market value.

The companies announced Sunday that Kinder Morgan Inc., Kinder Morgan Energy Partners, Kinder Morgan Management and El Paso Pipeline Partners will all combine under the Kinder Morgan Inc. umbrella and trade under the KMI ticker symbol.

Houston-based Kinder Morgan Inc. says the total purchase price of the three other companies is $71 billion, including $27 billion of assumed debt. The combined market value of the four companies was $92 billion as of the close of the market Friday. That would make it the fourth largest U.S. energy company after Exxon Mobil, Chevron and ConocoPhillips.

Source: Yahoo News

CEO Richard Kinder also stated the following ...

“All shareholders and unitholders of the Kinder Morgan family of companies will benefit as a result of this combination,” said Chairman and CEO Richard D. Kinder. “Everyone will hold a single, publicly traded security – KMI – which will have a projected dividend of $2.00 in 2015, a 16 percent increase over the anticipated 2014 dividend of $1.72. We expect to grow the dividend by approximately 10 percent each year from 2015 through 2020, with excess coverage anticipated to be greater than $2 billion over that same period. This combined entity will be the largest energy infrastructure company in North America and the third largest energy company overall with an estimated enterprise value of approximately $140 billion. Additionally, we will have a leading position in each of our business segments and operate in the rapidly growing North American energy infrastructure sector"

I'm really not sure what to make of all of this, but I'm very happy to see the commitment to the dividend is still strong going forward. In the short term it'll be interesting to see how the market reacts to this tomorrow.


  1. I just saw this a little while ago, as well. It sounds like there is some value there for current KMI shareholders to hang in. Strong increase for 2015 and beyond projected.

  2. It sure is good news for shareholders. The commitment to dividend raises next year and beyond is music to my ears :)


  3. I love this news. Very happy as a KMI shareholder.

  4. So what do you think would be a fair price for KMI atm? I'm thinking about buying more KMI on thursday when I get my monthly salary

  5. If based on pure dividend play, as mentioned by Mr Kinder, $2 of dividend for 2015 will yield 5.1% based on $39 / share with 10% grown till 2020. A very attractive buy.

  6. Love the a KMI shareholder, we are thrilled to hear the CEO is committed to a dividend raise this upcoming year and continued growth in the following 5 years.

    Cheers to rising dividends for the next 5 years! AFFJ

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    1. Thanks for the nomination! I've just posted my answers. Cheers