Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Inergy (CEQP) jumped as much as 10% today after the company announced a merger.
So what: Inergy will combine with Crestwood Midstream Partners (NYSE: CMLP) and Inergy Midstream (NYSE: NRGM) into a company with an enterprise value of about $7 billion. In the end, Inergy will have a larger stake in both companies, giving it greater scale to expand into shale fields.
Now what: The pipeline business is quickly consolidating because scale is very important to shale developments. Companies need to create wide networks to collect and store energy, and Inergy will be in better position to do that now. I think that the company's organic growth opportunities and newfound scale will be the catalysts that will drive the stock higher over the next few years.
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