Brookfield nears $9 billion-plus deal for Colonial Pipeline, sources say

Brookfield Asset Management is putting the final touches on a deal to acquire Colonial Pipeline, the largest U.S. fuel transportation system, for more than $9 billion including debt, people familiar with the matter said on Monday.

The New York-based asset manager has emerged as the winner of the auction process, which the five owners of the pipeline have been running over several months, the sources said, requesting anonymity as the deliberations are confidential.

A deal between Brookfield and the owners could be formally announced in the coming weeks, barring any last-minute snags, the sources added.

Reuters was first to report in June that the owners - including Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), energy major Shell, and investment firm KKR - had begun exploring a sale of Colonial Pipeline.

Brookfield, CDPQ, KKR, IFM and Shell declined to comment. A spokesperson for Colonial Pipeline directed questions to its owners. Koch Industries did not immediately respond to a request for comment.

Colonial's pipeline system stretches over 5,500 miles from Houston in Texas to New York's harbor. It moves more than 100 million gallons of fuel daily, including gasoline, jet fuel, diesel and heating oil, according to its website.

CDPQ bought its stake in Colonial for $850 million in 2012 from ConocoPhillips. IFM Investors and KKR acquired their respective 15.8% and 23.4% holdings in 2007 and 2010.

Shell consolidated its 16.13% into a single holding in 2019, while a subsidiary of Koch Industries has held its current 28.1% position since 2003.

Bloomberg reported earlier in March that Brookfield was leading the race to acquire Colonial Pipeline for more than $10 billion.