Brookfield Strikes $9 Billion Deal For Colonial Pipeline—Shell Offloads Minority Stake

Shell PLC SHEL shares are trading lower premarket on Friday. On Thursday, the company’s subsidiary, Shell Midstream Operating LLC, reached an agreement to sell its 16.125% stake in Colonial Enterprises, Inc. to Brookfield Infrastructure Partners LP’s BIP subsidiary, Colossus AcquireCo LLC, for $1.45 billion.

Together with Shell, the co-owners of Colonial Enterprises have agreed to sell 100% of their Colonial shares to Brookfield.

In particular, Brookfield Infrastructure Partners and its institutional partners have agreed to acquire Colonial Enterprises, including the Colonial Pipeline, for $9 billion (9x EBITDA).

The transaction values Shell’s stake at $1.45 billion, factoring in around $500 million in non-recourse debt, with customary closing adjustments excluded.

Spanning 5,500 miles from Texas to New York, Colonial is the largest refined products pipeline in the U.S., with a strong performance history.

BIP will contribute $500 million, or 15% of the total equity investment, funded through capital recycling initiatives. The deal is expected to close in the second half of 2025, pending regulatory approvals.

Notably, Colonial is jointly owned by Shell Midstream (16.125%), Koch Capital Investments Company, LLC (28.088%), KKR-Keats Pipeline Investors (23.443%), Caisse de dépôt et placement du Québec (16.549%), and IFM Investors (15.795%).

Last month, at Capital Markets Day 2025, Shell disclosed plans to increase shareholder distributions from 30%-40% to 40%-50% of cash flow from operations (CFFO) throughout economic cycles.

Shell has raised its structural cost reduction target from $2-3 billion by the end of 2025 to a cumulative $5-7 billion by 2028, based on 2022 levels.

Investors can gain exposure to the stock via Precidian ETFs Trust Shell plc ADRhedged SHEH and Abacus FCF Real Assets Leaders ETF ABLD.

Price Action: SHEL shares are down 4.66% at $66.52 premarket at the last check Friday.

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