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HOUSTON - Plains All American Pipeline, L.P. (NASDAQ:PAA) and Plains GP Holdings (NASDAQ:PAGP), currently valued at $17.24 billion, announced Tuesday they have reached an agreement to sell substantially all of their natural gas liquids (NGL) business to Keyera Corp. (TSX:KEY) for approximately $5.15 billion CAD ($3.75 billion USD) in cash. According to InvestingPro data, Plains maintains a solid 5.15% dividend yield and is currently trading below its Fair Value.
The transaction, expected to close in the first quarter of 2026 subject to regulatory approvals, will divest Plains’ Canadian NGL operations while retaining its U.S. NGL assets and all Canadian crude oil assets. InvestingPro analysis reveals the company has maintained dividend payments for 54 consecutive years, suggesting strong financial stability through various market cycles.
The sale represents approximately 13 times the expected 2025 distributable cash flow from these assets, according to the company’s press release statement.
Net proceeds after taxes and transaction expenses are expected to be approximately $3 billion USD. Plains indicated it may issue a one-time special distribution of approximately $0.35 per unit to offset potential individual tax liabilities associated with the transaction.
"Plains is exiting the Canadian NGL business at an attractive valuation while Keyera is receiving highly complementary and critical infrastructure in a strategic market," said Willie Chiang, Chairman and CEO of Plains. Analyst consensus supports this strategic move, with price targets ranging from $15.50 to $43.00 per share. For detailed analysis and more exclusive insights, check out the comprehensive Pro Research Report available on InvestingPro.
The company plans to use proceeds for bolt-on acquisitions to expand its crude oil portfolio, potential repurchases of preferred units, and opportunistic common unit repurchases.
Plains estimates it will incur approximately $360 million USD in entity-level taxes payable in Canada related to the sale and restructuring of remaining Canadian crude assets.
Following the transaction, Plains will position itself as a pure-play crude oil midstream entity. The company currently handles approximately eight million barrels per day of crude oil and NGL across its North American infrastructure network. While InvestingPro’s Financial Health Score indicates some challenges, analysts expect improved net income growth this year, potentially strengthening the company’s market position.
Plains will reclassify the NGL assets associated with the transaction as discontinued operations as of June 30, 2025.
In other recent news, KeyCorp has seen several notable developments. BofA Securities raised its price target for KeyCorp to $20 from $18, maintaining a Buy rating due to the bank’s potential to benefit from increased U.S. capital expenditure. The firm highlighted KeyCorp’s strong position in commercial and industrial lending and its middle markets investment banking. In another development, KeyBank, a part of KeyCorp, made a minority equity investment in Qolo to enhance its payment solutions, continuing its strategy of investing in fintech innovations. The partnership aims to improve KeyBank’s technology offerings, particularly through the KeyVAM® cash management solution. Additionally, Keefe, Bruyette & Woods maintained an Outperform rating on KeyCorp with a price target of $18, noting positive signs in investment banking and loan growth. Jefferies initiated coverage with a Hold rating and an $18 price target, citing KeyCorp’s diversified revenue streams but expressing caution due to economic uncertainties. Furthermore, KeyCorp’s shareholders recently elected all board nominees and ratified Ernst & Young LLP as auditors for the fiscal year 2025, reflecting strong shareholder support for the company’s leadership and strategic direction.
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