Blackstone Infrastructure Partners Acquires Controlling Interest in Tallgrass Energy

Blackstone Infrastructure Partners moved to consolidate its position in the US midstream sector, acquiring the remaining publicly held common units of Tallgrass Energy LP for $3.2 billion on March 11, 2019. This transaction takes the midstream energy company private, valuing the entire enterprise at $9 billion. The deal grants Blackstone full control over Tallgrass Energy's extensive network, which includes over 8,300 miles of natural gas and crude oil pipelines, notably the Rockies Express Pipeline (RXP) and Pony Express Pipeline, spanning the US Midwest and Rockies. By taking Tallgrass private, Blackstone gains direct operational and financial control, allowing for long-term strategic investments and optimization away from public market pressures. This move aligns with Blackstone's approach as the world's largest alternative asset manager, focusing on building strong businesses within dynamic sectors. The transaction provides an exit for Kelso & Company, a New York-based private equity firm that has raised over $16 billion in capital since its 1971 inception, specializing in control investments within North American middle-market companies. Tallgrass Energy, LP and Tallgrass KC, LLC, which collectively operate approximately 10,000 miles of natural gas and crude oil pipelines across the US Midwest and Rockies, transition from public ownership. GIC, a global long-term investor established in 1981 to manage Singapore’s foreign reserves across more than 40 countries, is listed as an investor, potentially indicating a co-investment alongside Blackstone or an existing stake in Tallgrass. Similarly, Enagás, a Spanish natural gas transmission system operator and Technical Manager of the System, is also noted as an investor in the deal. This move by Blackstone, the world's largest alternative asset manager, demonstrates the continued appetite for stable, cash-generating US energy infrastructure assets among institutional investors seeking long-term returns.