Brookfield to Buy Colonial Pipeline Owner in $9 Billion Deal

(Bloomberg) -- Brookfield Infrastructure Partners LP and its institutional associates agreed to acquire Colonial Enterprises Inc., the operator of the biggest US fuel pipeline, in a deal that values the pipeline operator at $9 billion. 

Colonial’s five owners are selling their entire stakes to Brookfield, including a Shell plc unit that will transfer its 16.125% interest for $1.45 billion, according to a statement Friday. 

The deal comes as President Donald Trump seeks to expand domestic energy infrastructure. However, building new oil and natural gas pipelines in the US faces significant regulatory and permitting barriers, making existing assets valuable. Bloomberg News reported in March that Brookfield was emerging as the lead contender to acquire Colonial. 

The Colonial Pipeline runs for 5,500 miles (8,850 kilometers) from Texas to New Jersey, and is the main source of gasoline, diesel and jet fuel for the East Coast. It was shut down for five days in 2021 after a cyberattack, leading to fuel shortages across the region. 

Shell’s Midstream Operating unit will sell its stake to a Brookfield unit called Colossus AcquireCo. Colonial’s other owners comprise the industrial conglomerate Koch Inc., with 28.1%, a unit of private equity firm KKR & Co., with 23.4%, Canadian pension fund Caisse de Depot et Placement du Quebec, with 16.5%, and infrastructure owner IFM Investors Pty with a 15.8% share. 

The deal is expected to close in the fourth quarter. Debt financing was led by Morgan Stanley and Mizuho Bank Ltd. The financial advisors to Brookfield were Jefferies LLC, Greenhill & Co. and Morgan Stanley, while Kirkland & Ellis LLP was legal advisor.

Brookfield has already invested in global pipeline assets. It owns a controlling stake in Brazil’s NTS pipeline that spans more than 2,000 kilometers. The asset manager was also part of a consortium that bought a a $10.1 billion stake in Abu Dhabi’s natural-gas pipelines in 2020.

(Updates with deal value in first paragraph, owners in fifth paragraph)

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