Enterprise Products partners to acquire its holding company for $8 billio

Oil and gas pipeline operator Enterprise Products has announced that it will acquire its holding company - Enterprise GP Holdings - for $8.03 billion.

The move, which is the second such acquisition for Enterprise Products, is designed to create a master limited partnership. Such a partnership would simplify corporate structure and make the Houston-based company more profitable by lowering the partnership's cost to raise money.

"Master limited partnerships are tax-advantaged vehicles commonly used in the energy industry for holding stable, fee-producing infrastructure assets such as pipelines and energy-processing plants," the Wall Street Journal reports, adding that this structure has become popular with many energy companies.

Analysts agree that the acquisition could be beneficial to Enterprise Products' cost-effectiveness.

The deal "is really a function of having a more competitive capital structure and being able to consummate deals," Oppenheimer & Co analyst Bernard Colson said. "This is a trend that continues, not many of these general partners last long. The deal is a big positive in the long term."