Energy Transfer ( ET ) shares are trading lower. The company on Tuesday announced the acquisition of WTG Midstream in a $3.25 billion transaction.

The Details: On Tuesday morning, Energy Transfer ( ET ) said it entered into a definitive agreement to acquire WTG Midstream from affiliates of Stonepeak, Davis Estate and Diamondback Energy.

The transaction, which is valued at $3.25 billion, will include $2.45 billion in cash and about 50.8 million newly issued common units from Energy Transfer ( ET ).

Energy Transfer ( ET ) expects to benefit from the addition of WTG assets by gaining increased access to growing natural gas and related supplies, which will strengthen its Permian Basin operations and downstream businesses. The company noted that it will gain access to more than 6,000 miles of gas gathering pipelines and eight gas processing plants.

The acquisition also includes a 20% interest in the BANGL Pipeline, a 425-mile NGL pipeline connecting the Permian Basin to Texas Gulf Coast markets, with a starting capacity of 125,000 barrels per day, expandable to over 300,000 barrels per day.

“We would like to congratulate Stonepeak and the WTG team on this fantastic outcome,” said Travis Stice, CEO of Diamondback Energy.

“Not only has our partnership generated an outsized economic return, but WTG’s gas gathering and processing system continues to support Diamondback’s substantial activity on our dedicated acreage. We are excited to further expand our relationship with Energy Transfer ( ET ) and expect a smooth operational transition.”

Diamondback plans to use the proceeds from the transaction to reduce debt associated with the pending Endeavour Energy Resources merger. The transaction is expected to close in the third quarter of 2024.

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ET Price Action: At the time of writing, Energy Transfer ( ET ) stock was down 0.32% and trading at $15.39, according to Benzinga Pro.

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