Marathon Petroleum Corp's master limited partnership (MLP), MPLX LP, will acquire MarkWest Energy Partners LP for about $15.63 billion to add natural gas processing facilities to its portfolio.
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The deal is expected to create the fourth-largest MLP, based on a market value of $21 billion, the companies said on Monday.
MLPs, under pressure to keep growing dividends to investors, are increasingly consolidating.
The deal comes less than a month after Energy Transfer Equity's unsolicited $48 billion offer for Williams Cos Inc.
Marathon Petroleum will contribute $675 million to fund the cash component of the deal.
MarkWest unitholders will get 1.09 common units of MPLX and $3.37 in cash for every unit held.
The offer price works out to $78.64 per unit, based on MarkWest's Friday close, a premium of about 32 percent.
MPLX will also assume MarkWest's debt of about $4.2 billion.
The deal is expected to close in the fourth quarter, the companies said.
UBS Investment Bank is MPLX's financial adviser for the deal and Jones Day its legal adviser. Jefferies LLC is MarkWest's financial adviser and Cravath, Swaine & Moore LLP its legal adviser. (Reporting by Shubhankar Chakravorty in Bengaluru; Editing by Kirti Pandey)