10/17/2011 08:41 EDT | Updated 12/17/2011 05:12 EST

AmeriGas to acquire Energy Transfer's propane operations for $2.9 billion

VALLEY FORGE, Pa. - AmeriGas will buy the propane operations of Energy Transfer Partners for about $2.9 billion, the company said Monday.

The Valley Forge, Pa. propane retailer is paying $1.5 billion in cash and about $1.3 billion in AmeriGas common stock. It also will assume $71 million in Energy Transfer's debt.

Energy Transfer Partners L.P., of Dallas, has propane operations in 41 states through subsidiaries including Heritage Propane. The deal gives more than a million additional retail propane customers to AmeriGas, effectively doubling its size. It's expected to contribute to AmeriGas' goal of increasing distribution by 5 per cent per year.

The deal is expected to close late this year or early in 2012. AmeriGas Partners L.P. says shareholder approval is not required at either company.

"This transaction provides AmeriGas with an outstanding opportunity to grow its core business," CEO Eugene V.N. Bissell said in a statement.

It is also the third sizeable energy deal announced in just two days.

Earlier Monday, Norwegian oil company Statoil ASA said it would buy Brigham Exploration Co. of Austin, Texas for $4.4 billion in cash, giving it control of fields in North Dakota. That came a day after Kinder Morgan announced plans to buy El Paso Corp. for $20.7 billion in a bid to create America's largest natural gas pipeline operator.

After closing, Energy Transfer will own about 34 per cent of AmeriGas Partners' common stock and will keep the shares until at least 2013. Energy Transfer will appoint one director to AmeriGas' board after the closing.

The deal was structured so that AmeriGas' balance sheet would remain strong and its credit ratings preserved, the company said. It will contribute to AmeriGas' goal of growing earnings before interest, taxes, depreciation and amortization by 3 per cent per year, the company said.

Shares of AmeriGas, which has more than a million residential, industrial and commercial propane customers, closed Friday at $45.92 and have traded in a range of $36.76 to $51.50 in the past year.