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    Energy Transfer Partners Makes Second Dropdown to Sunoco LP

    Wholesale fuel distribution deal valued at $816M.

    HOUSTON — Energy Transfer Partners LP (ETP) implemented the second phase of its plan to drop down its entire retail business to Sunoco LP.

    Under terms of the agreement announced Monday, Sunoco LP will purchase a 31.58-percent equity interest in Sunoco LLC, which distributes approximately 5.3 billion gallons of motor fuel to customers in the East, Midwest and South regions of the United States.

    The deal is valued at $816 million, $775 million of which Sunoco LP will pay in cash. The remainder, $40.8 million, will be Sunoco LP units issued to ETP based on the five-day weighted average price of Sunoco LP's unit price on March 20. Sunoco LP also expects to fund the acquisition using proceeds from the private offering of senior notes.

    The transaction is expected to close in April, subject to customary closing conditions and completion of financing arrangements. It is expected to be immediately accretive to Sunoco LP's distributable cash flow.

    "This transaction gives us new exposure to customers in 26 states from Maine to Florida to Louisiana, where the Sunoco fuel brand is very strong, complementing our current base of wholesale customers in the Southwest and Hawaii," said Robert W. Owens, president and CEO of Sunoco LP. "We will also enhance our sales channel portfolio with additional jobbers — who supply fuel to independent retailers — in our mix of customers."

    In addition to this announced wholesale acquisition, Houston-based Sunoco LP operates Aloha Petroleum, Mid-Atlantic Convenience Stores and Tigermart locations.

    Dallas-based ETP operates Stripes stores and Sac-N-Pac locations. It also operates a retail network of company- and independently operated convenience stores branded under the Sunoco and APlus names. ETP had 6,650 retail locations as of Dec. 31, including 1,251 company-operated sites.

    ETP has previously stated it plans to drop down all of these retail assets to Sunoco LP in the next 24-30 months.

    In September, ETP completed its first dropdown when it moved the Mid-Atlantic Convenience Stores business to Sunoco LP.

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