Who gains from the action for Kinder Morgan in El Paso, in what ways, and for...

Who gains from the action for Kinder Morgan in El Paso, in what ways, and for what reasons?

Expert Solution

The Kinder Morgan acquisition of El Paso was one of the largest energy industry deal back in 2011. The deal was worth about $21 billion in cash and stock.

There are two things that happened during the deal. Acquiring El Paso made Kinder Morgan a dominant company in the market and they were the only company that could handle the oil sands pipeline that ran to the West Coast of USA. This made them be able to deliver oil and gas all over the country.

However, during acquisition, Kinder Morgan had to pay a premium for El Paso. While the deal was for $21 billion, there were other debts and affiliated business that they had to take over as well. This brought the overall deal to around $38 billion. According to NY times report, the premium over the current price (back in 2011 October) was about 30-40% above the traded price of El Paso stocks.

So looking at both the scenarios, we can see that El Paso gained handsomely from the sale of the company and Kinder gained a large market share in an extremely fierce marketplace. Thus we can conclude that it was a win-win situation for both the companies.

keosha answered 10 months ago

Who is the Texas Senator who represents the El Paso area? To what standing committees does...

Who is the Texas Senator who represents the El Paso area? To what standing committees does he/she been assigned?

El Paso Water Utilities (EPWU) purchases surface water for treatment and distribution to EPWU customers from...

El Paso Water Utilities (EPWU) purchases surface water for treatment and distribution to EPWU customers from El Paso County Water Improvement District during the irrigation season. A new contract between the two entities resulted in a reduction in future price increases in the cost of the water from 10% per year to 5% per year for the next 20 years. If the cost of water next year (which is year 1 of the new contract) will be $530 per acre-ft....

Who gains and who loses from import restrictions?

Who gains and who loses from appreciations in the Canadian dollar?

What are some ways to overcome collective action problems?

Who gains and who loses from inflation? Does this change if the inflation is anticipated vs....

Who gains and who loses from inflation? Does this change if the inflation is anticipated vs. unanticipated?

3. a) Who gains and who loses from tariffs? Explain this gain and loss in terms...

3. a) Who gains and who loses from tariffs? Explain this gain and loss in terms of effect of trade on consumers and producers. Who is the consumer here and who is the producer? b.) With the help of a graph, clearly explain the effect of tariff on consumers and producers. What is the net effect on the economy’s total welfare? Does the effect on welfare depend on the amount of tariff?

What is happening now with inflation in the U.S.? Who gains and who loses if interest...

What is happening now with inflation in the U.S.? Who gains and who loses if interest rates go up? What do you think the Fed should do, if anything, to stabilize the inflation rate? What could cause the U.S. to experience inflation such as in Venezuela?

Who gains and who loses from import restrictions? In answering, you should consider both consumers and...

Who gains and who loses from import restrictions? In answering, you should consider both consumers and producers in both the country that imposes the restrictions and in the other countries affected by them. Also, be sure to take into account the effects of import restrictions on export industries.

Explain two di¤erent ways in which we can illustrate gains from trade.

Question