Summary
- PSX announced an agreement Friday to buy the remaining publicly held LP units in DCP Midstream for $41.75 each, raising Phillips 66's stake in DCP to 86.8%.
- The remaining economic interests in DCP are held by Enbridge, which owns 13.2% of the MLP's General Partner.
- PSX expects the acquisition will generate $1 billion of incremental adjusted EBITDA with an additional $300 million of synergies by integrating DCP's assets into PSX's Midstream Segment.
- With a forward P/E of only 5.4x, a current yield of 3.7%, and prospects for another summer of tight refined product markets, PSX is significantly undervalued here.
For further details see:
Phillips 66 Grows By Swallowing DCP Midstream