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Targa to acquire Atlas midstream assets for $7.7 billion

Atlas Energy LP has inked a $7.7-billion deal in which Targa Resources Corp. of Texas will acquire most the the company’s assets.

The Philadelphia-based company, which was once one of the leading producers in Pennsylvania but has shifted to the midstream sphere through its pipeline subsidiaries, is selling off all its midstream assets. Those include four major pipeline systems — two in Texas and two in Oklahoma — and 17 processing plants to treat oil, natural gas and natural gas liquids.

Before Targa can acquire the company, Atlas will first spin off its non-midstream assets, which include its exploration-and-production arm; a 16 percent interest in an investment firm that specializes in oil and gas called Lightfoot Capital Partners; and a 5 percent interest in a master limited partnership called Arc Logistics Partners.

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Atlas Resource Partners LP, a master limited partnership that will also be spun out from the parent company, has interest in more than 14,000 producing oil and gas wells in Texas, Appalachia, New Mexico, Alabama, Oklahoma and Colorado.

The Atlas group of companies has a history of selling off major parts to big players then rebuilding in anticipation of another such sale. In 2011, Atlas sold its vast Marcellus Shale assets to Chevron Corp. for $4.3 billion.

If the deal with Targa goes through, Atlas Energy shareholders will receive 18 shares of Targa stock for each of their own shares, $9.12 in cash per share, as well as a pro-rata share in 100 percent of the distributed non-midstream assets.

The transaction is subject to shareholder approval and is expected to close during the first quarter of 2015.


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