DALLAS - Sunoco LP (NYSE: SUN) and NuStar Energy L.P. (NYSE: NS) have announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, a significant step towards Sunoco's acquisition of NuStar. This development satisfies a critical condition for the transaction's completion.
A key upcoming event is the NuStar unitholder vote scheduled for May 1, 2024, to decide on the proposed acquisition. The terms of the agreement have been detailed in NuStar's Definitive Proxy Statement, filed with the Securities and Exchange Commission (SEC) on April 3, 2024. Following unitholder approval, the transaction is expected to close promptly.
NuStar unitholders are set to receive Sunoco's distributions for the first quarter of 2024 after the transaction concludes. This merger is a strategic alignment of Sunoco's extensive distribution network, which services over 10,000 outlets across the United States and territories, with NuStar's pipeline and storage operations that span approximately 9,500 miles and include 63 terminal and storage facilities.
The combined entity is anticipated to leverage Sunoco's distribution capabilities and NuStar's storage and pipeline infrastructure, potentially enhancing the efficiency and reach of both companies' operations in the energy sector.
The transaction is advancing amidst a series of regulatory and shareholder approvals, with both companies emphasizing the anticipated benefits of the merger. However, the forward-looking statements issued by the companies also acknowledge the uncertainties and risks inherent in such large-scale business integrations.
The information provided in this article is based on a press release statement.
InvestingPro Insights
As Sunoco LP (NYSE: SUN) moves forward with the acquisition of NuStar Energy L.P. (NYSE: NS), investors are closely monitoring the financial health and market performance of NuStar. With a market capitalization of $2.85 billion and a P/E ratio of 31.24, NuStar is trading at a premium based on its earnings. However, the company's PEG ratio, which stands at a low 0.33 for the last twelve months as of Q4 2023, suggests that its earnings growth rate may justify the higher P/E ratio.
NuStar's dividend yield is notably high at 7.11%, reflecting a strong commitment to returning value to shareholders. This is further underscored by the fact that NuStar has maintained dividend payments for 24 consecutive years, a testament to its financial resilience and shareholder-friendly policies. Additionally, NuStar's stock has experienced a large price uptick over the last six months, with a 36.41% total return, and a remarkable 56.3% return over the last year, indicating strong market confidence.
Investors considering the implications of the Sunoco-NuStar merger may find these metrics particularly relevant. The merger could potentially amplify the strengths of NuStar, as it integrates with Sunoco's extensive distribution network. For those seeking further insights, there are additional InvestingPro Tips available, which include analyst revisions on earnings and near-term growth prospects. To explore these insights and more, visit https://www.investing.com/pro/NS and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 11 additional tips listed on InvestingPro, investors can gain a comprehensive understanding of NuStar's financial position and future outlook.
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