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There will soon be only two propane providers in Inyo County as AmeriGas has made an offer to acquire Heritage Operating, L.P. and Titan Energy Partners, L.P. the parent companies of Turner Propane and other smaller local providers such as Lone Pine Propane.
The $2.9 billion deal will secure AmeriGas as the leading propane provider in the nation, according to AmeriGas.
Steve Sheffield, vice president of Marketing and Operation for Heritage, said it is still too early to speculate on how the deal will effect employees at both Bishop facilities, but said, â€śAt this point it should be business as usual and customers should expect the same continued great service.â€ť
Sheffield added it is also too early to speculate on how the merger will affect pricing.
â€śPricing is complex,â€ť Sheffield said, explaining that a myriad of factors are involved. He did say that the acquisition may become a factor in driving prices down, but didnâ€™t elaborate.
Employees of local propane providers, who asked to remain anonymous, said they did not expect many layoffs. They said that as all three providers in town, Turner, AmeriGas and Eastern Sierra Propane, are busy and fulfilling a need, they said they could not foresee AmeriGas laying off employees only to hire more employees to meet the demands of the public.
Representatives from Lone Pine Propane said they have heard nothing more from Heritage other than what was included in a press release, published and mailed Oct. 17.
Tom Sigler, owner of Eastern Sierra Propane, said he welcomes the competition. He said competition is healthy; â€śIt keeps everyone on their toes.â€ť
The acquisition will mean another million customers added to AmeriGasâ€™ 1.3 million-customer base in all 50 states in more than 1,200 locations. As of press time, it could not be determined how many customers Turner and Lone Pine Propane currently service. Sheffield said that information was â€śproprietaryâ€ť and not for public disclosure.
The details of the merger and what it will mean for employees should be available at the beginning of 2012, Sheffield explained.
According to a press release, â€śAmeriGas Partners have reached a definitive agreement to acquire the propane operations of Energy Transfer Partners for total consideration of approximately $2.9 billion, including $1.5 billion in cash, approximately $1.3 billion in AmeriGas common units, and the assumption of $71 million in debt. Energy Transfer conducts its propane operations in 41 states through subsidiaries including Heritage Operating, L.P. and Titan Energy Partners, L.P.
â€śThe acquisition of Heritage Propane will add over one million retail propane customers and over 500 million gallons to AmeriGasâ€™ nationwide propane distribution operations.â€ť
The press release goes on to explain the â€śtransactionâ€ť as a â€śunique opportunity to utilize a broader platform to enhance productivityâ€ť and it is seen as a time to â€śoptimize service to our customers and ensure strong financial performance for our investors.â€ť
The deal must be approved under the Hart-Scott-Rodino Act, and is expected to close early in 2012. The act, as defined by the Federal Trade Commission, requires all large mergers go through a waiting period during which the FTC and the Department of Justice examine the merger and approve it if satisfactory to the two entities.
Neither AmeriGas Partners nor Energy Transfer unit-holder approval is required in connection with this transaction.
AmeriGas has employed the expertise of J.P. Morgan Securities, LLC â€śas an advisor for the purpose of providing a fairness opinion to its Board of Directors in connection with the transaction.â€ť
For more information, go to the AmeriGas website, http://www.amerigas.com and click on the â€śInvestor Relationsâ€ť tab.