Sunoco acquired NuStar Energy, an independent operator specialising in liquids and terminal pipelines, in an all-equity deal valued at around $7.3 billion, including assumed debt. NuStar Energy boasts an extensive infrastructure comprising approximately 9,500 miles of pipeline and sixty-three terminal and storage facilities. These assets play a critical role in storing and distributing various products, including crude oil, renewable fuels, refined products, specialty liquids, and ammonia. Additionally, NuStar operates in Mexico and possesses nearly forty-nine million barrels of storage capacity.
As reported by D Magazine, for Sunoco, this acquisition aligns with its strategic capital allocation objectives on a larger scale. By divesting its convenience store operations in the 7-Eleven sale, Sunoco aims to bolster its distribution capabilities and enhance its credit profile. The purchase of NuStar Energy signifies a move towards vertical integration, providing Sunoco with opportunities to realize approximately $50 million in additional annual cash flow through the refinancing of high-cost floating-rate capital.
