Kinder Morgan bid for El Paso Corp. would create North American natural gas pipeline giant

Kinder Morgan Inc.struck a $21 billion deal to buy rival El Paso Corp., combining the two largest natural gas pipeline operators in North America in a huge bet on the fast-growing market for that fuel. The cash and stock deal announced on Sunday values El Paso at a 37 percent premium to its Friday market value, and comes as Exxon Mobil Corp XOM.N and other oil majors are spending billions of dollars to develop and produce shale gas and crude oil in areas with poor infrastructure. It was not immediately clear how regulators would view the deal. Kinder Morgan said it expected the deal to close in early 2012. El Paso already owned the largest natural gas pipeline system in North America, with more than 43,000 miles of pipe. The combined company would own 67,000 miles of natural gas pipe and another 13,000 miles of pipelines to move refined products and other fuels. The deal derails El Paso’s plan, announced in May, to split into two publicly traded companies, which would have separated its exploration and production business from its pipeline operations. Kinder Morgan said it plans to sell El Paso’s exploration and production assets. ..more