Kinder Morgan closes deal for El Paso

HOUSTON (AP) -- Kinder Morgan has completed its $20 billion acquisition of El Paso Corp., creating the largest operator of natural gas pipelines in the U.S.

The company expects the tie up to accretive to earnings and result in annual savings of more than $400 million, which is greater than previous projections of $350 million in cost savings a year.

The deal, originally announced in October, becomes effective Friday. The combined entity will operate more than 80,000 miles of natural gas pipeline.

Kinder Morgan boosted its 2012 dividend projection to at least $1.40, to account for the effects of the El Paso deal. The company previously projected $1.35 in dividends, excluding the effects of the acquisition.

In addition, as part of the sale agreement, El Paso board members Anthony Hall Jr. and Robert Vagt were named to Kinder Morgan's board. Hall joined the El Paso board in 2001, while Vagt has served on it since 2005, Kinder Morgan said.

Also on Thursday, private equity firm Apollo Global Management LLC closed its $7.15 billion deal for El Paso's exploration and production business. Kinder Morgan said it will use the proceeds from the sale to reduce the debt it incurred to fund the cash part of the El Paso acquisition

In afternoon trading, shares of Kinder Morgan Inc. fell 76 cents, or 2.3 percent, to $32.40, while El Paso shares fell 10 cents to $29.41 and Apollo shares fell 12 cents to $11.56.