Analysis of the Relevant Companies/industry

III. Analysis of the Relevant Companies/Industry:

The following are the data we have for both the acquiring and acquired firms in terms of their sustainable working capital, sustainable growth rate, debt, cost of capital and DuPont analysis.

Industry Comparison:

Kinder Morgan

Sector: Energy or Utilities

Industry: Oil and gas Pipelines or Natural Gas

Sub Industry: Oil and Gas Storage and Transportation

S&P Reported Peer Group:

Sub-Industry : Oil & Gas Storage & Transportation Peer Group*: Based on market capitalization's

IV. Description of the event including what management said and what analysts said:

Event

Kinder Morgan agreed on October 16th, 2011 to buy the El Paso Corporation for about $21.1 billion in cash and stock, striking one of the biggest energy deals in history, to tap into a boom in natural gas drilling and production. Through the deal, Kinder Morgan will become the biggest of North America’s midstream energy companies, which are entities that process oil and gas products before transporting them to production facilities. Kinder Morgan will own or operate about 67,000 miles of pipelines stretching across the continent.

Reaction from Management Team

CEO of Kinder Morgan, Rich Kinder thinks that the merger will help Kinder Morgan expend its network and it is a good thing for both the acquiring and acquired companies: "We believe that natural gas is going to play an increasingly integral role in North America. We are delighted to be able to significantly expand our natural gas transportation

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