Chesapeake Midstream Partners (CHKM) said late yesterday it has agreed to acquire Appalachia Midstream Services, a subsidiary of Chesapeake Midstream Development, which is in turn a subsidiary of Chesapeake Energy Corporation (NYSE:CHK), for $865 million.
The assets include Marcellus Shale midstream assets, which Chesapeake Midstream said will make it the largest gathering and processing master limited partnership as measured through output volume.
Chesapeake Midstream will now own 47% of an integrated system with about 200 miles of gathering pipeline in the Marcellus Shale.
Output for the assets is more than one billion cubic feet per day.
The acquisition is expected to close by December 30, and will be funded with $600 million in cash and $265 million in equity, which will increase Chesapeake's limited partner ownership of Chesapeake Midstream from 42.3% to 46.1%.
Companies in Chesapeake Midstream's sector include Atlas Pipeline Partners (NYSE:APL) and DCP Midstream Partners (DCP).
Chesapeake Midstream and Chesapeake Energy shares were not seeing big gains or losses in Thursday's premarket trading.
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