Kinder Morgan merges oil, gas, pipeline assets in consolidation

HOUSTON (Bloomberg) -- Kinder Morgan Inc. will merge all its oil and natural gas storage and pipeline partnerships under the corporate parent in a $70 billion consolidation that creates the largest energy infrastructure company in North America.

Kinder Morgan, or KMI, will buy all the outstanding equity securities of Kinder Morgan Energy Partners LP, Kinder Morgan Management LLC and El Paso Pipeline Partners LP -- all of which are controlled by the corporation, according to a statement.

Kinder, which helped pioneer the MLP structure, has been under pressure from investors to consolidate or find other ways to grow.

The deal will simplify the Kinder empire and create a single publicly traded corporation with an enterprise value of $140 billion, according to the statement. The move runs counter to a trend in the industry of energy companies spinning off infrastructure segments as master limited partnerships to obtain the tax benefits.

MLPs trade in units rather than shares. Holders of Kinder Morgan Partners and El Paso will have the option of taking cash or KMI shares in return for their units, Houston-based Kinder said.