California Energy Company To Complete Large Business Merger
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Mergers & Acquisitions on Thursday, July 31, 2014.
The energy industry is important to the nation’s economy as well as the worldwide marketplace. What happens in the energy industry affects just about every other sector in the economy. This is one reason why it is significant that a California energy company has just entered into a large business merger agreement with an out-of-state energy corporation.
The company in California, Breitburn Energy Partners, has just agreed to terms for acquiring QR Energy. The merger involves $1.6 billion worth of stock and is set to form one of the largest energy companies in the United States. The total value of the merger deal is estimated at around $3 billion. This includes debt owed by QR Energy as well as preferred Class C convertible stock units.
The new company will legally be considered a master limited partnership, which is a special type of legal partnership that usually provides regular cash payouts to stock unit-holders. This type of corporate structure is essentially a limited partnership that is also traded publicly via a securities exchange. The newly formed company will focus mainly on operating in the oil industry.
A large business merger such as this one in California will require a significant amount of legal paperwork. Contracts must be drafted in order to ensure all parties involved understand the terms of the deal. Also, certain legal documents must be submitted to the proper regulating agencies. Completing certain tasks late or with errors can cause significant problems in the future and should be avoided if possible.
Source: New York Times, "Breitburn Energy Partners to Buy QR Energy", July 24, 2014