Energy Transfer Partners (ETP) and Sunoco (SUN) announced the dropdown to SUN of the remaining 68.42% interest in Sunoco and 100% interest in the legacy Sunoco retail business for approximately $2.226 billion. The transaction will be effective as of January 1, 2016 and is expected to close in February 2016.

SUN will pay to ETP approximately $2.2 billion in cash (including the expected value of working capital) and will issue to ETP approximately 5.7 million SUN common units valued at approximately $194 million based on the five-day volume-weighted average price of SUN’s common units as of November 13, 2015. Pro forma for the dropdown transaction and related equity private placement, ETP will remain the largest unitholder of SUN with an approximate 46% LP interest, reflecting ETP’s continued confidence in SUN’s business and future growth prospects.

A significant portion of the consideration for the transaction will be provided by a $2.035 billion term loan due October 2019 fully underwritten by Bank of America Merrill Lynch, Credit Suisse, Compass Bank, Mizuho Bank and TD. The terms of the term loan will substantially mirror SUN’s existing $1.5 billion revolving credit facility. The pricing of the term loan is LIBOR + 250 bps (with stepdowns in pricing tied to Debt/EBITDA levels at SUN).

The timing of this dropdown transaction is driven by the view that accelerating the dropdown of the remaining retail marketing and wholesale fuel assets to SUN was in the best interest of all parties. SUN expects that, following the completion of this transaction, it will not need to raise any additional equity financing in 2016. The transaction is also expected to be credit neutral to SUN and to be accretive to distributable cash flow and expected distributions per unit for SUN in 2016 and thereafter.

This transaction will complete SUN’s transformation into one of the leading wholesale fuel and retail marketing platforms in the U.S. with tremendous geographic scale and a unique diversity of business drivers. With the completion of the dropdown program, SUN will be able to focus on a broad range of opportunities to grow via third-party acquisitions and capital projects.