FTC clears Kinder Morgan acquisition

FTC clears Kinder Morgan acquisition

	Published : Thu, 25 Jan 2007 20:10 By : Agencies Print this Story

WASHINGTON (AFX) - The Federal Trade Commission on Thursday approved, with conditions, the $22 billion takeover of energy transportation and storage provider Kinder Morgan Inc. by a management-led investment group.

The investment group, which includes several Kinder Morgan executives and private equity firms The Carlyle Group and Riverstone Holdings LLC, have agreed to relinquish control of a rival company and representation on its boards.

Without this, the FTC said the deal would threaten competition for gasoline storage in the southeast United States and raise gas prices because Carlyle and Riverstone own significant stakes in Magellan Midstream Partners LP, a competitor of Kinder Morgan that also transports gas and other petroleum products.

The two private investment firms have agreed, the commission said, to remove their representatives from Magellan's boards of managers and directors and to cede contol of Magellan to its other principal owner, Madison Dearborn Partners.

The consent order also mandates that the two firms not attempt to influence the management of Magellan and take steps to prevent the sharing of sensitive information between Kinder Morgan and Magellan.

Other members of the investment group include Kinder Morgan Chairman and Chief Executive Richard D. Kinder, co-founder Bill Morgan, board members Fayez Sarofim and Mike Morgan, and affiliates of Goldman Sachs Capital Partners and American International Group Inc.

The group is seeking to buy the company and take it private for an estimated $22 billion, including $7 billion in debt.

The FTC is accepting public comments on its consent order approving the transaction, and will vote Feb. 26 on whether to make it final.

Kinder Morgan shareholders approved the transaction last month. The transaction is expected to close during the first quarter of 2007.

Shares of Kinder Morgan rose 24 cents to $106.65 in mid-day trading on the New York Stock Exchange.