Shares Of The Kinder Morgan Empire Are Going Insane After Mega-Deal

On Sunday, pipeline operator Kinder Morgan announced a massive deal that will combine the company's four publicly-traded entities into one company.

Following the announcement, shares of the parent Kinder Morgan (KMI) were up 17%, Kinder Morgan Energy Partners (KMP) was up 24%, and Kinder Morgan Management (KMR) was up 29%, and El Paso Pipeline Partners (EPB) was up 27%.

"All shareholders and unitholders of the Kinder Morgan family of companies will benefit as a result of this combination," said Chairman and CEO Richard D. Kinder in a press release. "Everyone will hold a single, publicly traded security - KMI - which will have a projected dividend of $2.00 in 2015, a 16 percent increase over the anticipated 2014 dividend of $1.72."

"This combined entity will be the largest energy infrastructure company in North America and the third largest energy company overall with an estimated enterprise value of approximately $140 billion. Additionally, we will have a leading position in each of our business segments and operate in the rapidly growing North American energy infrastructure sector," Kinder said.

The New York Times' David Gelles noted that the deal reverses the master limited partnership model that Kinder pioneered in the 1990s.

Kinder told Gelles that, "Even though I'm the largest shareholder and one of the two co-founders it's hard to understand."