Crosstex Energy (NYSE:ENLC) and Devon Energy (NYSE:DVN) have announced plans to collaborate on creating a new business focusing on midstream energy. Under the terms of the new deal, Devon's U.S. midstream assets will join with Crosstex's to create a master limited partnership and a general partner.

Both will be public companies, with Devon Holdings having a controlling interest in both. Devon President and CEO John Richels believes the integration of both companies' midstream assets will "greatly accelerate the value proposition of Devon's previously announced standalone master limited partnership in a manner that is highly accretive to our shareholders." Meanwhile, Crosstex CEO and President Barry Davis said the transaction "provides the New Company with greater operating leverage and strong sponsorship from a leading North American exploration and production company."

The new company is expected to bring in $700 million in EBITDA for 2014. Crosstex and Devon will announce a name following the close of their transaction. Following the news, Crosstex's price per share jumped 25% to $35.32, while Devon peaked at $66.48 per share and eventually dropped to $65.32.

Fool contributor Caroline Bennett has no position in any stocks mentioned. The Motley Fool owns shares of Devon Energy. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.